The stock market once again cares about the coronavirus pandemic as cases surge across the U.S. and Europe. The U.S. recorded a record number of confirmed cases on Friday, with many states driving the increase. On top of the COVID-19 surge, a stimulus bill getting signed before the election is looking less likely as the days tick away without an agreement. The Dow Jones Industrial Average (^DJI 0.23%) was down about 2.4% at 11:45 a.m. EDT on Monday.

Apple (AAPL 2.08%) was down less than the market on Monday following some analyst optimism regarding the iPhone 12 and the company's vast services business. Other stocks in the Dow exposed to a worsening pandemic didn't fare as well.

A medical worker standing near a man in a car.

Image source: Getty Images.

Apple tapped to outperform

Expectations of strong demand for non-iPhone products, an acceleration of the services segment, and a big upgrade cycle for the iPhone 12 have led analysts at Evercore to put Apple stock on its "tactical outperform" list. Evercore also maintained its outperform rating and its $135 price target.

Evercore sees the potential for Apple's fiscal 2021 results to outpace analyst expectations, driven by a higher average selling price for iPhones, new service offerings, and solid sales of Macs and iPads. The iPhone 12 family raises the base price from the iPhone 11 family, although a slightly cheaper iPhone 12 Mini will become an option in November.

Evercore does concede that results for the next couple of quarters may not impress. For the quarter ending in September, a lack of new iPhone models and the availability of the budget-priced iPhone SE could drag down iPhone sales. For the quarter ending in December, Evercore is worried about Apple's gross margins.

The company is launching new iPhones into a U.S. economy that has been both ravaged by the pandemic and propped up by the $2.2 trillion CARES Act passed in March. That stimulus bill, which sent checks to Americans and added a weekly $600 supplement to unemployment payments, almost certainly contributed to Apple's strong results during the pandemic.

With a winter wave of COVID-19 looking like a certainty, a lack of new stimulus could make Apple's pricey new iPhones a tough sell for consumers over the next few months. An iPhone 12 supercycle is possible, but it's far from guaranteed.

Shares of the tech giant were down about 0.7% by late Monday morning. Apple stock is still up roughly 56% so far this year.

Stocks drop on COVID-19 exposure

Every Dow stock was in the red just before lunch time on Monday as cases of COVID-19 surge across the country. Notable losses include a 4% decline for American Express (AXP 0.45%), a 3.7% decline for Boeing (BA 1.01%), and a 3.1% decline for Disney (DIS 1.04%).

American Express depends on travel and entertainment spending, both of which have been gutted by the pandemic. The credit card giant reported a 20% sales decline for its third quarter last Friday, and the company maintained a cautious outlook. With the pandemic surging in the U.S. and Europe, American Express may be in for a tough winter.

Boeing is in a similar situation. Demand for air travel has plummeted due to the pandemic, and a record-setting wave of the virus this winter won't help. Daily passenger traffic through airport security checkpoints is still down around 60%; a full recovery could take years if the economy is slow to rebound. Airline bankruptcies could further roil the industry, although additional airline bailouts are a possibility.

Disney still hasn't reopened its Disneyland resort in California, although Disney World in Florida has been open since July. A third wave of the coronavirus will make reopening difficult in the coming months, and there's no guarantee that Disney World will remain open if the pandemic gets bad enough. Disney is doubling down on streaming to make up for lost revenue elsewhere, but it will be tough going for the iconic company, at least for the next few months.

The market is starting to worry about the pandemic again, punishing stocks exposed to renewed stay-at-home orders. There will eventually be a light at the end of the tunnel, but right now the winter is looking bleak for many pandemic-exposed stocks.