Wall St slumps on rising virus cases, fading stimulus hopes

US stocks fell sharply on Monday as surging coronavirus cases and a stalemate in Washington over the next fiscal aid bill darkened the economic outlook in the run up to the Nov. 3 presidential election.

New infections have touched record levels in the United States, with El Paso in Texas asking citizens to stay at home for the next two weeks. In Europe, Italy and Spain imposed new restrictions.

Travel-related stocks that are vulnerable to COVID-19 related curbs including American Airlines, United Airlines Holdings and Booking Holdings Inc fell between 3% and 4.5%.

All major S&P sectors were trading lower with economically-sensitive energy, industrials and financials recording the steepest percentage declines.

Wall Street's main indexes had ended lower last week as investors closely monitored talks over the next round of fiscal package, while economic data pointed to a stalling recovery.

US House Speaker Nancy Pelosi on Sunday said the Trump administration was reviewing the latest proposal for COVID-19 relief over the weekend and that she expected a response on Monday.

"The harsh reality is it's going to be very difficult to get as much as the $2 trillion deal even if they have something today or tomorrow," said Ryan Detrick, senior market strategist at LPL Financial, North Carolina.

"It's not going to happen until after the election."

Meanwhile, more than 59.1 million Americans have already voted in person or by mail as President Donald Trump and Democratic challenger Joe Biden enter their final week of campaigning.

It is also one of the busiest week of the third-quarter earnings season that will see results from mega-cap US tech firms including Apple Inc, Amazon.com Inc, Google-parent Alphabet Inc and Facebook Inc.

Of the 135 companies in the S&P 500 that have reported earnings so far, 83.7% of them have beaten Wall Street expectations, according to Refinitiv data.

At 09:41 a.m. ET, the Dow Jones Industrial Average fell 367.31 points, or 1.32%, to 27,968.26, the S&P 500 index lost 32.08 points, or 0.93%, to 3,433.31 and the Nasdaq Composite index lost 34.94 points, or 0.30%, to 11,513.34.

Software company Oracle Corp fell 3% after its German rival SAP abandoned medium-term profitability targets and cautioned its business would take longer than expected to recover from the pandemic hit.

Hasbro Inc fell about 7% despite beating analysts' estimates for quarterly revenue and profit.

Declining issues outnumbered advancing ones by 6.6-to-1 on the NYSE and 0.3-to-1 on the Nasdaq.

The S&P index recorded two new 52-week highs and no new low, while the Nasdaq recorded 20 new highs and 10 new lows.