Why the election still has investors nervous

Wall Street is really starting to sweat the presidential election.

When it comes to politics, investors have no shortage of things to worry about as Hillary Clinton and Donald Trump head into the homestretch of the 2016 race for the White House. The worry-list includes: Hard-to-trust — and too-close-to-call — polls. Election headlines that read like police blotters: FBI investigations. A sexual groping scandal. Fears of post-vote violence. A U.S.-style Brexit-moment. A new president that a large swath of Americans won't back.

It's a stomach-churning Maalox moment for Wall Street — and the market tumult is seen potentially lasting beyond Election Day.

The anxiety level of investors and threat to the stock market is already showing up. The Standard & Poor's 500 stock index closed lower for an eighth straight day Thursday, its longest losing streak in eight years, a signal that investors are wary and unwilling to make big bets. Fear is also making a comeback, as a widely followed Wall Street "fear gauge" has shot up nearly 70% in the past eight trading days. Election unease is spreading to Main Street, where nearly six in 10 Americans worry the election outcome will "lead to market volatility," and 33% say the election will have a "negative effect" on their retirement savings accounts, according to a recent Edward Jones study.

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All the crazy headlines swirling around the candidates and narrowing polls (an aggregate of many polls by RealClear Politics shows Clinton ahead by just 2.2 points but some are flashing a tie) has elevated Wall Street's uncertainty, the one thing markets "loathe," says Thorne Perkin, president of Papamarkou Wellner Asset Management.

Fast-changing election story lines and polls "introduces a fear of the unknown,"   Perkin adds. "It is very difficult for pundits to predict the election results."

There are three big worries weighing most heavily on Wall Street. The biggest is a Trump win, and all the surprise, uncertainty and risk that would unleash. Another worry is a Democratic sweep of the presidency and both chambers of Congress (although odds are low), as that result would help fast-track many Democratic policies deemed less positive for economic growth, such as higher taxes on the wealthy and investors, more regulation of businesses and tougher stances on key sectors such as banks and drugmakers. A third pressure point is if uncertainty does not lift after the election, due to questions about the fairness of the vote or post-election violence.

The angst was on full display Wednesday in Wall Street reports. "The Donald Dive," was the headline from Jeff Saut, chief investment strategist at Raymond James, blaming the latest stock slide on "investors contemplating a Trump victory." Craig Erlam, senior market analyst at OANDA, wrote: "Trump Risk Takes its Toll Ahead of the Fed," noting that election risk is overshadowing Federal Reserve interest rate policy.

"Disputed election result would introduce new uncertainty," blared a headline from Capital Economics.

"Spike In Put Buying Reflects Anxiety," noted Chris Verrone, an analyst at Strategas Research Partners, referring to a type of trade that investors put on to insure against losses from a falling stock market.