Jan. 4 (UPI) -- After briefly reaching record highs early in the session, U.S. stocks fell sharply on Monday as investors responded with worry to a weekend spike in COVID-19 cases and political uncertainty.
The S&P 500 and Dow Jones Industrial Average each began the day at record levels, but quickly plunged into negative territory, with the Dow shedding more than 700 points, or 2.3%, around noon EST.
By mid-afternoon, both indexes -- as well as tech-heavy Nasdaq -- were each down around 1.5% for the day. The Dow was lower by 531 points, or 1.7%, to 30,079, while the S&P was off 57 points, or 1.5%, at 3,698.
The Nasdaq fell by 175 points, or 1.4%, to 12,713.
The sell-off put the Dow and S&P on course for their biggest one-day drop since Oct. 28, while the Nasdaq was en route to its worst day since Dec. 9.
Analysts blamed the plunge on a combination of bad news about the continuing surge of COVID-19 cases around the world and uncertainty about the outcome of two U.S. Senate runoff elections in Georgia set for Tuesday.
Victories by Democratic candidates Jon Ossoff and Ralph Warnock over Republicans David Perdue and Kelly Loeffler would shift control of the upper chamber to Democrats, which could in turn spark a sell-off on fears that corporate tax rates would rise substantially under President-elect Joe Biden's administration.
The United States recorded a record-breaking day of nearly 300,000 new COVID-19 infections Saturday, followed by 200,000 more Sunday, raising concerns that even with a relatively rapid roll-out of new vaccines, the economy will remain constrained for weeks to come.
"The parabolic rise in new cases seems to be leveling off, a sign that perhaps the fall surge is running its course. But the economic impact will remain for a few more months at least," James Meyer, chief investment officer at Tower Bridge Advisors, said in a research note.