"Obviously the virus is out of control. It's spiking, it's bad," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.
"The concept that ... it's going to disappear is just a faulty assumption." Shares of hotels, airlines and other companies sensitive to Covid-19-related turmoil fell. Wynn Resorts slid 3.6 per cent and the S&P
1500 airlines index declining 4.0 per cent. The energy index fell as oil prices tumbled on fears of a deeper drop in fuel demand.
With just six days to the election, Wall Street's fear gauge spiked to its highest level since July 15, also on concerns that a winner might not be declared the night of Nov. 3 due to a delay in counting the huge volume of mail-in ballots.
Democratic challenger Biden leads President Donald Trump nationally by 10 percentage points, according to the Reuters/Ipsos poll, but the competition is tighter in swing states, which will decide the victor.
Investors are worried about whether the election will be contested; a clear "blue wave" that gives Biden and his Democrats control of the White House and Congress; or Trump's re-election, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.
"As people run through the likely scenarios of what could happen with the election, there's no short-term good answer," he said.
Losses were broad-based with technology stocks weighing the most.
The Big Tech companies - Apple, Alphabet, Amazon and Facebook - which are due to report results on Thursday, fell between 3 per cent and 4.7 per cent, weighing the most on the S&P
At 2:27 p.m. ET (1827 GMT), the Dow Jones
Industrial Average fell 792.7 points, or 2.89 per cent, to 26,670.49. The S&P 500 lost 96.32 points, or 2.84 per cent, to 3,294.36 and the Nasdaq Composite dropped 339.66 points, or 2.97 per cent, to 11,091.70.
Of the 206 S&P 500 companies that have reported third-quarter earnings so far, about 83 per cent have topped expectations, according to Refinitiv data. But earnings on average are expected to fall 14.8 per cent from a year earlier.
Microsoft Corp's quarterly results surpassed analysts targets, benefiting from a pandemic-driven shift to working from home and online learning. Its shares, however, fell about 4 per cent after rising nearly 35 per cent so far this year.
General Electric Co was one bright spot, jumping 8 per cent after posting a surprise quarterly profit and a positive cash flow on the back of cost cuts and improvements in its power and renewable energy businesses. GE was the largest percentage gainer on the S&P 500.
Declining issues outnumbered advancing ones on the NYSE by a 9.52-to-1 ratio; on Nasdaq, a 6.49-to-1 ratio favored decliners.
The S&P 500 posted one new 52-week highs and eight new lows; the Nasdaq Composite recorded 13 new highs and 101 new lows.
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