Dow Ends 2.5% Lower As New Covid Variant Causes Year's Worst Drop

New York, (UrduPoint / Pakistan Point News - 27th Nov, 2021 ) :The new Covid-19 variant that has prompted travel restrictions worldwide caused Wall Street to plunge in Friday's holiday shortened session, with the Dow seeing its worst loss of the year.

The benchmark Dow Jones Industrial Average finished at 34,899.34, a loss of 2.5 percent, or more than 900 points from the close on Wednesday, before the Thanksgiving holiday.

The broad-based S&P 500 fell 2.3 percent to finish at 4,594.62, while the tech-rich Nasdaq Composite index declined 2.3 percent to 15,491.66.

The equity bloodletting came after South Africa on Thursday announced the discovery of the B.1.1.529 variant of the virus, which was met with a new cascade of travel restrictions, including by Britain and the European Union.

On Friday, the World Health Organization declared the strain a variant of concern, renaming it Omicron.

Wall Street has hit records in recent weeks, but in a session that was three hours shorter than normal due to the Thanksgiving holiday and saw low trading volume overall, investors pulled back decisively over fears the new variant could undercut the US economy's recovery.

"It's a single track market today," said Ross Mayfield, investment strategy analyst at Baird, pointing to fears the new variant could be worse than the Delta strain of the virus, which slowed US growth and hiring in the third quarter.

"I think the market's reaction to the level of uncertainty being faced right now, especially near all-time highs before this, probably makes some sense."Travel and tourism companies were particularly hard hit in the sell off, with Delta Air Lines closing 8.3 percent lower, United Airlines finishing down 9.6 percent and American Airlines losing 8.8 percent.

Cruise firm Carnival lost 11 percent, while Royal Caribbean fell 13.2 percent.