On Friday, US stocks sank, with the Dow Jones Industrial Average briefly falling over 1000 points at session lows, as a new COVID-19 variant first identified in South Africa appeared to be spreading worldwide. Investors were indeterminate whether the new variant could reverse several months of progress at getting the coronavirus pandemic under control.
The S&P 500 index fell 106.84 points – 2.3 percent – at 4594.62. Moreover, it was the worst day of the year for Wall Street’s benchmark index since Feb. 2021. The Dow Jones Industrial Average lost 905.04 points – 2.53 percent – closing at 34899.34, while the NASDAQ Composite dropped 2.23 percent, closing at 15491.66.
Authorities across the globe reacted with alarm on the day to the COVID-19 variant discovered in South Africa, with the United Kingdom and European Union among those tightening border crossings as researchers pursued to establish if it was jab-resistant.
Royal Caribbean Cruises, Norwegian Cruise Line, and Cruise operators Carnival Corp each plunged over 10 percent, while shares in American Air Lines, Delta Air Lines, and United Airlines also tumbled. Moreover, the NYSE Arca Airline Index slipped 6.45 percent in its most significant one-day decline since September last year.
The petroleum prices dropped nearly 13 percent, the most significant decline since early in the deadly pandemic, due to concerns of another slowdown in the world economy. That, in turn, plunged energy stocks. Exxon Mobil Corp shares dropped 3.5 percent while Chevron slipped 2.3 percent.
A senior portfolio manager at Global Investments in Atlanta, Keith Buchanan, said that it’s déjà vu all over once more for like the 8th time. What they realize about the new variant could accelerate over the weekend; if there’s more concerning news than good news, many people do not want to be holding risk assets early Monday, or are afraid of what that could look like early Monday.
In a report, Jeffrey Halley of Oanda said that investors are anticipated to shoot first and ask queries later until more is known. That was obvious from the move in the bond market, where the yield on the ten-year Treasury note dropped to 1.48 percent from 1.64 percent on Nov. 24. As a result, banks took the heaviest losses. JPMorgan Chase fell 3 percent.
There have been other coronavirus variants, the highly contagious Delta variant devastated much of America throughout the summer, and public officials, the general public, and the investors are nervous about any new COVID variant that is spreading. It has been about two years since COVID-19 emerged, killing more than 5 million people around the globe so far.
The economic influences of this variant were already being felt. The U.K. and the EU both proclaimed travel restrictions from southern Africa on Nov. 26. After the market closed, America also put travel restrictions on those coming from South Africa and seven other African countries.
Asian Stocks Also Sank
Even digital currency Bitcoin got caught up in the selling. According to CoinDesk, Bitcoin fell 8.4 percent to 54179 dollars.
Furthermore, Asian stock markets sank on Friday after some European nations tightened curbs on business and travel following a surge in COVID-19 infections, and South Africa reported a new variant of concern, Omicron.
The Shanghai Composite Index dropped 0.5 percent to close at 3566.18, and the Nikkei 225 fell 2.6 percent to 28746.20. The Hang Seng Index lost 2.1 percent to 24213.55. Moreover, the Korea Composite Stock Price Index (KOPSI) slipped 1.8 percent at 57752.68. Southeast Asian and New Zealand markets also declined.