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Monday, January 24, 2022

Dow Tumbles 900 Points As Fears Over New Covid-19 Variant Grip Global Markets

Stocks tumble as fears over new Covid-19 variant grip global markets. (Mandatory Credit: Nikada/Getty Images)

By Anneken Tappe

(CNN) — Wall Street is in a frenzy on Black Friday as stocks around the world tumbled in the face of a new Covid-19 variant.

US equities took a dive at the open and continued their downward path Friday morning with the Dow tumbling more than 900 points. Oil prices were also badly hit.

The new variant has been detected in South Africa, Botswana, Hong Kong and Israel, prompting some countries to put flight bans in place.

Over the summer, the Delta variant spooked consumers and weighed on sectors like leisure and hospitality. Now investors and economists worry this new variant could do the same.

Wall Street was deep in the red around mid-morning Friday, with the Dow falling 2.5%, or some 900 points, in what is shaping up to be a volatile session. The broader S&P 500 tumbled 1.9% and the Nasdaq Composite was down 1.8%.

“The pandemic and COVID variants remain one of the biggest risks to markets, and are likely to continue to inject volatility over the next year” or even beyond, said Keith Lerner, co-chief investment officer and chief market strategist at Truist Advisory Services, in a note to clients.

“It’s hard to say at this point how lasting or impactful this latest variant will be for markets,” he added.

It’s a shortened trading session as the New York Stock Exchange will close at 1 pm ET after being closed Thursday for Thanksgiving. Reduced trading volume during this half-day session is also likely to exacerbate the swings in the market.

Nevertheless, it could shape up to be one of the worst days of the year for stocks.

But not all stocks are taking a beating. Within the S&P 500, healthcare stocks are climbing, led by Covid vaccine manufacturers Moderna and Pfizer. Moderna shares were up some 25% around mid-morning, while Pfizer stock climbed more than 5%.

Outside of equities, other asset classes were also struggling Friday.

Oil prices are tumbling, for example. US oil futures fell 11%, or more than $8, to $69.66 per barrel around mid-morning. The global benchmark Brent dropped 9.3% to $74.57 per barrel.

The US dollar, measured by the ICE US Dollar Index, which pegs it against its main rivals, was down 0.7% Friday morning.

Cryptocurrencies also felt the heat, dropping across the board. Bitcoin was down more than 7% around mid-morning, according to CoinDesk data.

Meanwhile, investors are pushing into safe haven investments. The 10-year US Treasury bond got more expensive and yields fell more than 0.1 percentage points to 1.5% Friday morning. Gold prices also jumped.


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