What a wild ride today with the Dow down 700 points at times but recovering in the last hour to recover all but 157. Lately it’s been the triple threat of stimulus-COVID-election. Today add a fourth threat – overbought tech!  That’s what happened today. It’s been reported since the start of the pandemic that tech is a safe haven since demand for it has grown with everyone stuck at home. Today the market decided that the whole sector is overvalued and about to be repriced; thus Apple, Facebook and Amazon all took a hit today. And it doesn’t help matters that today the infection rate passed the 9 million mark and the VIX hit a 20-week high, up from 15 weeks yesterday. The S&P has now fallen 9.7% from its September high and Apple reported its steepest drop in iPhone sales in two years. The bright spot remains Q3. At the halfway mark 86.2% of companies have beaten estimates and the profits forecast has again been upgraded, today to a 10.3% reduction versus Wednesday’s 14.8 percent.  Nerves continue to be frayed so volume is once again way above average at 10.3 billion as everyone sells as a hedge against possible bad news on Tuesday.  

FRI  OCTOBER 30, 2020  4:45 PM 

Tech slide hits Wall Street as coronavirus cases spiral

By Herbert Lash

DJ: 26,659.11  +139.16       NAS: 11,185.59  +180.73       S&P: 3,310.11  +39.08     10/29

DJ: 26,501.60  -157.51        NAS: 10,911.59  -274.00        S&P: 3,269.96  -40.15      10/30

NEW YORK (Reuters) - U.S. stock indexes closed lower on Friday, capping Wall Street’s worst week since the March sell-off, as losses in richly priced tech heavyweights, a record rise in coronavirus cases and jitters over the presidential election snuffed investor sentiment.  The pandemic pushed U.S. hospitals to the brink of capacity as coronavirus cases surpassed 9 million, while the prospect of wider COVID-19 restrictions in Europe raised concerns about the economic recovery.[nL8N2C60GZ]  The CBOE volatility index .VIX held at a 20-week high, a sign of investors jitters ahead of the final weekend before Election Day on Tuesday.

“We’re two market days away from Election Day and people want to make sure that they’re not completely caught off guard,” said Pete Santoro, a Boston-based equity portfolio manager at Columbia Threadneedle.

The S&P 500 has fallen about 9.7% since hitting an all-time high in early September in a rally driven by the tech mega caps whose quarterly results this week failed to meet highly optimistic expectations.  Apple Inc AAPL.O tumbled after it posted the steepest drop in quarterly iPhone sales in two years due to the late launch of new 5G phones.  Amazon.com Inc AMZN.O slid after it forecast a jump in costs related to COVID-19, while Facebook Inc FB.O fell sharply as it warned of a tougher 2021.  “All these names are eventually going to be repriced, they’re all ridiculously valued. It’s just that I don’t know when and I don’t know from what stratospheric valuation they inevitably reprice,” said David Bahnsen, chief investment officer at The Bahnsen Group in Newport Beach, California.

Communication services .SPLRCL got a boost from a jump in shares of Alphabet Inc GOOGL.O after the Google parent beat estimates for quarterly sales as businesses resumed advertising.  Google may have benefited as it has been trading at about 36 times earnings, far less than the 119 times earnings valuation of Amazon, Bahnsens said.  “There is a big selloff in those big tech names because they didn’t live up to the hype and people are really worried about next week’s election,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.  Republican President Donald Trump has consistently trailed Democratic challenger Joe Biden in national polls for months, but polls have shown a closer race in the most competitive states that could decide the election.

Dow Jones Industrial Average .DJI fell 157.51 points, or 0.58%, to 26,501.60, the S&P 500 .SPX lost 40.15 points, or 1.21%, to 3,269.96 and the Nasdaq Composite .IXIC dropped 274.00 points, or 2.45%, to 10,911.59.

The third-quarter earnings season is almost past its halfway mark, with about 86.2% of S&P 500 companies topping earnings estimates, according to Refinitiv data. Overall, profit is expected to fall 10.3% from a year earlier.

Twitter Inc TWTR.N slumped after the micro-blogging site added fewer users than expected and warned the U.S. election could affect ad revenue. 

Volume on U.S. exchanges was 10.31 billion shares.