US stocks fell on Friday, with the Dow Jones and the S&P 500 suffering their biggest percentage losses in a day in months, as sectors affected by the pandemic, which have benefited from a reopening, plunged after a new mutation of the coronavirus COVID-19.
Authorities around the world reacted with alarm on Friday to the variant of the coronavirus called “omicron” by the World Health Organization (WHO), found in South Africa, which is being studied if it is resistant to vaccines in use. The European Union (EU) and Great Britain were some of the territories that tightened border controls.
Cruise operators Carnival Corp, Royal Caribbean Cruises and Norwegian Cruise Line each plunged more than 10%, while shares of United Airlines, Delta Air Lines and American Airlines also fell.
The NYSE Arca Airline Index experienced its biggest one-day percentage decline in more than a year.
Retailers fell at the start of Black Friday, the start of the holiday shopping season, as the new variant fueled concerns about low store traffic and inventory problems.
The declines were wide, with large declines in all 11 major S&P sectors except health, which was down slightly thanks to strong earnings from COVID-19 vaccine makers Pfizer Inc and Moderna Inc.
“It’s déjà vu again, like for the eighth time,” said Keith Buchanan, senior portfolio manager at Global Investments. “Our understanding of this variant could accelerate over the weekend, if there is more worrying news than good news, a lot of people don’t want to have risk assets on Monday morning.”
Despite the sales, traders in the market pointed out that the drop was likely exaggerated by the low volume during the short holiday session after Thanksgiving.
Unofficially, the Dow Jones Industrial Average fell 905.04 points, or 2.53%, to 34,899.34, while the S&P 500 lost 106.74 points, or 2.27%, to 4,594.72 units. The Nasdaq lost 353.57 points, or 2.23%, to 15,491.66 units.
The CBOE volatility index, popularly known as Wall Street’s fear gauge, reached its highest level since September 20.
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