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US open: Stocks sharply lower amid fears regarding new Covid-19 variant

By Iain Gilbert

Date: Friday 26 Nov 2021

US open: Stocks sharply lower amid fears regarding new Covid-19 variant

(Sharecast News) - Wall Street stocks were firmly in the red early on Friday as traders returned from Thursday's Thanksgiving Day break to concerns regarding a new and virulent strain of Covid-19 found in South Africa.
As of 1530 GMT, the Dow Jones Industrial Average was down 2.40% at 34,945.08, while the S&P 500 was 1.76% weaker at 4,618.55 and the Nasdaq Composite came out the gate 1.47% softer at 15,612.06.

The Dow Jones opened 859.08 points lower on Friday after World Health Organization officials warned of a new Covid-19 variant in South Africa on Thursday, leading the United Kingdom to temporarily halt flights from six African nations and Israel to bar travel to several countries.

So far the variant, which contains more mutations to its spike protein than the already highly contagious Delta variant, appears to have been mostly isolated to South Africa, however, two cases have been identified in Hong Kong and Belgium also confirmed a case.

As a result of the market upheaval, the yield on the benchmark US 10-year Treasury note fell to 1.513%, a sharp reversal after yields rose to over 1.68% earlier in the week, and oil prices also tumbled, with West Texas Intermediate futures crashing 8.93% to $71.39 per barrel.

Travel stocks slumped on the news, with Carnival, Royal Caribbean, United Airlines, Delta Air Lines and American Airlines all trading lower, while shares in banks like Bank of America, Goldman Sachs and Citigroup also headed south amid fears of another slowdown in economic activity and retreating rates.

Wall Street's "fear gauge", the Cboe Volatility Index, rose to 28 - the highest level since September.

Markets will shut up shop at 1800 GMT on Friday to allow traders to take advantage of Black Friday sales events.

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