Dow finishes 450 points lower, triggered by first omicron case in U.S.




  • In Business
  • 2021-12-01 21:26:25Z
  • By NBC News
 

The major averages gave up solid gains and turned negative on Wednesday after the Centers for Disease Control and Prevention confirmed the first case of the omicron variant in the U.S.

The Dow Jones Industrial Average fell 462 points, after being up more than 520 points at the high of the day. The S&P 500 fell 1.2 percent and closed below its 50-day moving average for the first time since Oct 13. The Nasdaq Composite dropped 1.8 percent after rising as much as 1.8 percent earlier in the session, continuing a volatile streak of the last four sessions as the omicron threat emerged.

The losses came after the CDC reported the country's first case of the new, heavily mutated coronavirus variant called omicron in California. Omicron - first detected last week in South Africa - has been reported in at least 23 countries, according to the World Health Organization.

Travel stocks were the biggest losers following news of the first case on U.S. shores. American Airlines, Delta Air Lines and United Airlines all dropped more than 5 percent apiece. Boeing lost nearly 3 percent. Norwegian Cruise Line Holdings and Carnival got hit by 5 percent and 4 percent respectively. Wynn Resorts, Hilton Worldwide fell 2 percent.

"It feels as though the market was wondering when, not if there was going to be this new variant on our shores," said Art Hogan, National Securities chief market strategist. "I think we're at a place now where we understand there's a diminishing impact with new waves and new variants with this virus," he said.

Steve Massocca of Wedbush Securities said the initial market reaction was muted to the news of an omicron case in California because it's just one person and the symptoms are not severe.

He added that some of the selling has been related to tax loss selling and that will continue.

The newfound threat to the recovery from the pandemic, which caused several travel bans, is intensified by the Federal Reserve mulling a quicker-than-planned exit from its easy monetary policy.

Fed Chairman Jerome Powell jolted markets on Tuesday after he said the central bank is expected to discuss speeding up the taper of its minimum $120 billion a month bond-buying program. Despite the potential disruption of omicron, the Fed chief said he thinks reducing the pace of monthly bond buys can move quicker than the $15 billion-a-month schedule announced earlier this month. Powell's comments left the Dow down more than 650 points on Tuesday.

"I think that the taper need not be a disruptive event in markets. I don't expect that it will be. It hasn't been so far. We've telegraphed it," Powell said during Congressional testimony on Wednesday.

While stocks wrapped up a volatile month of trading on Tuesday, the major averages are up solidly for the year. The Dow is up 12.7 percent, the S&P 500 is up 21.6 percent and the Nasdaq Composite is up 20.6 percent.

COMMENTS

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business