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Dow falls more than 650 points as COVID-19 cases rise, stimulus hopes fade

Stocks were down badly on Monday as U.S. daily coronavirus cases hit record highs and investors dealt with the likelihood that stimulus negotiations will not produce a bipartisan relief deal before Election Day.

The Dow Jones Industrial Average closed with a loss of just more than 650 points after losing more than 900 points earlier in the day. The S&P 500 index closed with a loss of 1.9 percent, and the Nasdaq composite fell 1.6 percent.

Monday’s losses came amid increasing concern that the U.S will suffer under a punishing, nationwide surge in coronavirus cases with no further help from the federal government until after the elections.

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More than 83,000 new U.S. cases of COVID-19 were confirmed Saturday, shattering previous records.

The rise in COVID-19 cases has sparked fears that the U.S. will need to reimpose restrictions and business closures that had been previously lifted, following in the footsteps of European countries who have done the same. 

"Monday starts on a bleak note due to worries about rising virus caseloads. It was an ugly weekend from a COVID-19 standpoint, and we’re seeing Wall Street react with stock futures stumbling and volatility charging back up," wrote JJ Kinahan, chief market strategist at TD Ameritrade, in a research note published before the market opened. "Some U.S. states and European countries are bringing back shutdowns, and that’s hurting some of the 'reopening' stocks like cruise lines, restaurants, and airlines."

The U.S. is on track to face that resurgence without the boost from a bipartisan coronavirus relief bill barring a stunning breakthrough in talks between Speaker Nancy PelosiNancy PelosiWoman accused of trying to sell Pelosi laptop to Russians arrested Conspiracies? Let's investigate this one FBI investigating whether woman took Pelosi laptop, tried to sell it to Russians MORE (D-Calif.) and Treasury Secretary Steven MnuchinSteven MnuchinTreasury imposes additional sanctions on Cuba over allegations of 'serious human rights abuse' Treasury Department sanctions inner circle of Russian agent Derkach for election interference Sanders defends push to impeach Trump: Insurrection won't be tolerated MORE

The top Democratic and Republican negotiators reported slow but steady progress over nearly three weeks of negotiations intended to cement a bipartisan deal before Election Day. But the talks have devolved into finger-pointing and appear to be unlikely to produce a deal with less than two weeks until Nov. 3.

Eric Johnston, senior managing director at investment firm Cantor Fitzgerald, also noted the slew of corporate earnings reports set to come out this week as a factor behind Monday's selloff.

Updated at 4:08 p.m.