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Worried About Dow's Massive Crash? ETF & Stocks to Play

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While the start of the week has been rocky due to rising COVID-19 cases globally, the real blow came yesterday as Wall Street crashed. The S&P 500 and the 30-stock Dow Jones hit their lowest levels since late September, with the latter losing more than 943 points in a day.

With winter approaching, COVID-19 cases are on the rise. Parts of Europe announced additional lockdowns and U.S. cities such as Chicago, New York and New Jersey launched a new round of restrictive measures to fight the spread of coronavirus.

The Dow Jones has been one of the most-sensitive indexes to the coronavirus crisis as it logged the highest single-day losses of 2,997 points on Mar 16, 2,352.60 points on Mar 12 and 2,013.76 points on Mar 9. In June, the index recorded 1,861.82 points of one-day losses while it shed 1,190 points in one day in late February.  

COVID-19 infections are spreading across the United States at the fastest clip since the start of the pandemic, according to the latest NBC News figures. The 71,000 new cases per day that the United States averaged over the past week was the maximum in any seven-day stretch this year.

Across the pond, German Chancellor Angela Merkel announced new lockdown measures on Wednesday, shutting restaurants, bars, recreation centers, pools, and cinemas for one month, and restraining travel and large events.

French President Emmanuel Macron announced the second national lockdown for at least the whole of November. The moves would follow similar restrictions executed over the past few weeks in Italy and Spain.

Apart from this, the United States is prepping for the presidential election on Nov 3.Wall Street's fear gauge spiked to its highest level since Jul 15 due to election uncertainty. There are talks that a winner might not be declared the night of Nov 3 due to a postponement to count the huge volume of mail-in ballots.

How to Gain?

Against this backdrop, below we highlight the investment options that could be gainful in the current scenario. ProShares Short Dow 30 (DOG - Free Report) seeks daily investment results, before fees and expenses, that correspond to the inverse (-1X) of the daily performance of the Dow Jones Industrial Average. The fund gained 3.4% on the day.

There are stock specific options to play too. Below we highlight stocks of the index that were the least hurt on Oct 28.

Travelers Companies Inc (TRV - Free Report) – Up 2.0% on Oct 28

The Travelers Companies Inc., a holding company, is principally engaged, through its subsidiaries, in providing a wide variety of property and casualty insurance and surety products and services to businesses, organizations and individuals in the United States and select international markets. The stock has a Zacks Rank #3 (Hold).

3M Co (MMM - Free Report) – Down 1.56%

Conglomerate 3M’s focus on business transformation enhances its competitive advantage. Acelity, since acquired in October 2019, has been strengthening 3M’s medical solutions business. Being one of the largest manufacturers of respiratory masks, the coronavirus outbreak added to the company’s growth potential. The stock has a Zacks Rank #2 (Buy).

Verizon Communications Inc (VZ - Free Report) – Down 1.9%

The company is the largest wireless carrier in the North America, serving millions of customers nationwide. The stock has a Zacks Rank #3.

Walmart Inc. (WMT - Free Report) – Down 1.9%

The Zacks Rank #3 company has evolved from just being a traditional brick-and-mortar retailer into an omnichannel player.

Merck & Co Inc. (MRK - Free Report) – Down 2.3%

The Zacks Rank #3 company boasts more than six blockbuster drugs in its portfolio with PD-L1 inhibitor, Keytruda, approved for several types of cancer, alone making up for more than 25% of its pharmaceutical sales.

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