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“Many people had come to believe we were at least stable, and now we’re having a second uptick, which throws potential GDP and everything else up in the air,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. ”I did not expect this level of volatility or this degree of a sell-off.”

The S&P 500 lost 119.65 points to 3,271.03. The Dow lost 943.24 points, or 3.4%, to 26,519.95. The Nasdaq composite slumped 426.48 points, or 3.7%, to 11,004.87. The selling was widespread, and 96% of stocks in the S&P 500 fell.

The selling in U.S. markets followed broad declines in Europe, where the French president announced tough measures to slow the virus’ spread and German officials agreed to impose a four-week partial lockdown. The measures may not be as stringent as the shutdown orders that swept the world early this year, but the worry is they could still hit the already weakened global economy.

Coronavirus counts are also climbing at a troubling rate in much of the United States, and the number of deaths and hospitalizations due to COVID-19 are on the rise. Even if the most restrictive lockdowns don’t return, investors worry that the worsening pandemic could scare away customers of businesses regardless and sap away their profits.

Crude oil tumbled on worries that an economy already weakened by the virus would consume even less energy and allow excess supplies to build higher. Benchmark U.S. crude dropped 5.7% to $37.39 per barrel. Brent crude, the international standard, fell 5.4% to $39.12 per barrel.

Instead, investors headed into the safety of U.S. government bonds. The yield on the 10-year Treasury note fell to 0.77% from 0.79% late Tuesday. It was as high as 0.87% last week.

A measure of fear in the stock market touched its highest level since June, when the market suddenly tumbled amid concerns that a “second wave” of coronavirus infections had arrived. The VIX measures how much volatility investors expect from the S&P 500, and it climbed 20.8% Wednesday.

Even the continued parade of better-than-expected reports on corporate profits for the summer failed to shift the momentum.

Microsoft, the second-biggest company in the S&P 500, reported stronger profit and revenue for its latest quarter than expected. That’s typically good for a stock, but Microsoft nevertheless slumped 5%. It gave a forecast for the current quarter that was relatively in line with Wall Street forecasts, but analysts noted some caveats in it.

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UPS fell 8.8% after also reporting better-than-expected earnings, though it said the outlook for its business is too cloudy due to the pandemic to offer any forecasts for its revenue or profits in the current quarter.

Companies broadly have not been getting as big a pop in their stock prices as they typically do after reporting healthier-than-expected profits. Analysts say that suggests good news on profits has already been built into stock prices and that the market’s focus is elsewhere.

Investors’ hopes that Congress and the White House could soon offer more big support for the economy as it struggles through the pandemic have largely faded. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have continued their talks, but investors see little chance of a deal happening before Election Day next week.

Economists say the economy likely needs such aid after the expiration of the last round of supplemental unemployment benefits and other stimulus approved by Washington earlier this year.

Uncertainty about the upcoming presidential election has also been pushing markets around.

“The market never likes uncertainty,” said Stephanie Roth, portfolio macro analyst at J.P. Morgan Private Bank. “People are just taking profits ahead of the election, to some extent.”

The race seems be getting tighter than it was just a few weeks ago, said Jamie Cox, managing partner for Harris Financial Group. “It has markets somewhat unnerved that the prospects of a contested election are back in the mix,” he said.

Cox said he expects more calm in the markets in November after the election passes and some of the uncertainty over a new aid package fades.

“Aid is coming regardless. There’ll be no political motivation to hold it back after the election,” he said. “There’s plenty of desire to get money out to people so I think it will happen one way or another in November.”


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Stephen Miller tangles with Florida GOP freshman at House immigration meeting

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Freshman GOP Rep. María Elvira Salazar got into a lively exchange over immigration with former Trump aide Stephen Miller during a meeting with a group of House Republicans on Wednesday, according to multiple Republican sources.

The back-and-forth came during the end of Miller’s presentation before the Republican Study Committee, the largest conservative caucus within the House GOP. Miller, the architect of Donald Trump’s hard-line immigration policies, spoke before the group alongside other former Trump administration immigration officials.

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Sources say Salazar pushed for immigration policies that would broaden the GOP tent while challenging Miller on how Republicans can attract Hispanic and Latino voters given the ultra-conservative policies he is advocating.


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D.C. Mayor Muriel Bowser’s sister dies from Covid as city passes 1,000 deaths

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The statement came as the mayor declared Wednesday a day of remembrance for the more than 500,000 Americans and 1,000 D.C. residents who had died from the disease. The city announced that it had passed 1,000 deaths on Wednesday.

Bowser ordered flags to fly at half-staff and encouraged houses of worship to honor those who died in the pandemic on Wednesday evening.

“These beautiful souls who passed were grandparents, parents, siblings, cousins, neighbors, classmates, colleagues, friends and loved ones,” Bowser said in a statement announcing the day of remembrance. “This tragic milestone is a reminder that this pandemic has forever changed families and communities.”

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Mercia Bowser had previously worked for Catholic Charities and the D.C. Office on Aging, focusing her work on children, the elderly and those with behavioral disorders, the mayor said in her statement.


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A possible Tanden replacement privately touts her own Senate support

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Privately, too, O’Leary has reiterated her belief that the White House could and should still muster the votes needed for Tanden’s confirmation—noting that Tanden is qualified for the job and that her friends and allies should come to her side and not back down from defending her.

It’s a message that synced with administration officials who have refused to retreat from the nomination despite mounting evidence it’s going down.

But, at the same time, O’Leary has not shied away from touting her own qualification for the Biden administration’s top budget job should that no longer be the case. In conversations with numerous Democratic associates since her name began appearing in news stories as a possible fallback option, O’Leary has portrayed herself as a skilled policy architect and less partisan alternative, according to three Democrats familiar with the exchanges. O’Leary has gone as far as telling them that she could be confirmed by the Senate, two of the sources told POLITICO.

Reached by phone Wednesday, O’Leary restated her support for Tanden.

“Neera Tanden is exceptionally well qualified and should be confirmed for this position,” O’Leary said. “I have worked with her for years and years, and I can’t imagine a better advocate for President Biden to get his budget through Congress and help manage the policies of this administration. I am 1,000 percent behind her.”

One friend who spoke with O’Leary said the feeling they got from their conversation was that she was not campaigning for the OMB post. But the timing of O’Leary’s private comments raised eyebrows for others given her stated commitment to Tanden’s Senate confirmation battle and their history together. The two, at one point in time, were considered part of an exceedingly small “brain trust” for Hillary Clinton that included Heather Boushey, who now is on the Biden White House’s Council of Economic Advisers.

O’Leary’s private conversations in recent days also lend credence to a dynamic the White House itself has refused to publicly acknowledge: that Tanden’s chances of confirmation are increasingly dim and that machinations are underway to be her replacement.

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Several alternatives have emerged with competing constituencies in their corners. House Democrats are making the case for Shalanda Young, Biden’s deputy director nominee at OMB, whom they know from her time as staff director of the Appropriations Committee. Support for Shalanda on the Hill is so strong that Speaker Nancy Pelosi and lieutenants, including Rep. Jim Clyburn, were on board before Biden named Tanden. Progressives in the party are coalescing behind Gene Sperling, a former National Economic Council director.

O’Leary has a close relationship with White House Chief of Staff Ron Klain, who she would likely need the backing of to secure the OMB nomination if one opens. But she faces headwinds from her tenure with Newsom, a Democrat whose stewardship of the state amid the coronavirus crisis has been so uneven that opponents are closing in on the signatures to qualify a recall effort.

While O’Leary has loyal allies in California, including current and former Newsom aides who praise her policy command and record of accomplishments with Newsom, she confounded other advisers who argued that she struggled to get up to speed on the inner workings of Sacramento and its complex power dynamics.

She also co-chaired the state’s now-defunct Covid business task force with billionaire environmentalist Tom Steyer that ultimately was more for optics than actually addressing the issues at hand, with some high-profile defections at the end including Bob Iger.

The possible recall campaign, which comes against the backdrop of shuttered schools and irate business owners who blame their struggles on the state’s see-sawing coronavirus restrictions, could form the basis for critics trying to thwart an O’Leary Senate confirmation.


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