- Advertisement -spot_img
Wednesday, January 19, 2022

Stocks plunge on new COVID version; Dow loses 905 points

NEW YORK – Stocks sank on Friday, with the Dow Jones Industrial Average briefly falling more than 1,000 points, as a new coronavirus virus first detected in South Africa continued to spread around the world. Investors were unsure whether the variant could potentially reverse months of progress on bringing the COVID-19 pandemic under control.

The S&P 500 index fell 106.84 points, or 2.3%, to end at 4,594.62. It was the worst day for Wall Street’s benchmark index since February.

Banks, travel companies and energy companies pulled the index down as investors tried to rebalance to protect themselves financially from the new version. The World Health Organization called the version “highly permeable”.

Oil prices fell by nearly 13%, the biggest drop since the start of the pandemic, amid concerns of another slowdown in the global economy. This in turn pulled energy stocks down. Shares of Exxon fell 3.5% while Chevron fell 2.3%.

Blue Chips ended the day at 34,899.34, down 905.04 points. The Nasdaq Composite ended 353.57 points, or 2.2%, down at 15,491.66.

“Investors are likely to shoot first and ask questions later,” Oanda’s Jeffrey Haley said in a report. This is evidenced by action in the bond market, where the yield on the 10-year Treasury note fell to 1.48% from 1.64% on Wednesday. As a result, banks suffered some of the heaviest losses. JPMorgan Chase dropped 3%.

There have been other forms of the coronavirus — the Delta version ravaged the US throughout much of the summer — and investors, public officials, and the general public are concerned about any new variant spreading. It has been almost two years since the outbreak of COVID-19, which has killed more than 5 million people worldwide so far.

Cases of the new variant were found in Hong Kong, Belgium and Tel Aviv as well as in major South African cities such as Johannesburg.

Such economic impacts are already being felt. Flights between South Africa and Europe were under quarantine or were being stopped altogether. Airline stocks sold out quickly, with United Airlines down 9.6% and American Airlines down 8.8%.

“COVID was kept in the rear-view mirror by financial markets until recently,” said Douglas Porter, chief economist at BMO Capital Markets. “At least, (the virus) is likely to continue to throw sand into the gear of the global economy in 2022, maintaining (and) improving supply chains.”

Read Also:  Jerome Powell keeps his job at the Fed, where he will be responsible for preventing inflation from spiraling out of control - without affecting the economy.

Even bitcoin got caught in the sell-off. According to CoinDesk, the digital currency fell 8.4% to $54,179.

One sign of Wall Street concern was the VIX, a measure of market volatility sometimes referred to as its “fear gauge.” VIX jumped 53.6% to a reading of 28.54, its highest reading since January before the vaccines were widely distributed.

Fearing more lockdowns and travel restrictions, investors poured money into companies that benefited substantially from previous waves, such as Zoom Communications for meetings or Peloton for at-home exercise equipment. Shares of both companies rose nearly 6%.

Coronavirus vaccine makers were among the biggest beneficiaries of the emergence of this new version and subsequent investor backlash. Shares of Pfizer rose more than 6% while shares of Moderna gained more than 20%.

Merck shares, however, fell 3.8 percent. While US health officials said Merck’s experimental treatment of COVID-19 was effective, data shows the pill was not as effective at keeping patients out of hospital as originally thought.

World Nation News Deskhttps://www.worldnationnews.com
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
Latest news
Related news
- Advertisement -


Please enter your comment!
Please enter your name here