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U.S. Stocks Move Sharply Lower Amid Worries About New Covid Variant

wallstreet aug27 26nov21 lt

Stocks have moved sharply lower in morning trading on Friday as trading resumes following the Thanksgiving Day holiday on Thursday. With the steep drop on the day, the Dow has tumbled to its lowest intraday level in over a month.

The major averages have seen further downside in recent trading, falling to new lows for the session. The Dow is down 915.43 points or 2.6 percent at 34,888.95, the Nasdaq is down 256.28 points or 1.6 percent at 15,588.95 and the S&P 500 is down 90.33 points or 1.9 percent at 4,611.13.

The sell-off on Wall Street comes following reports a new and possibly vaccine-resistant coronavirus variant has been detected in South Africa.

The news, which comes amid a surge in new Covid-19 cases in Europe, has raised concerns the pandemic could continue to wreak havoc on the global economy.

The U.K. has issued a temporary ban on flights from six African countries in reaction to the new variant, which has also been detected in Belgium, Israel and Hong Kong.

The World Health Organization will hold a "special meeting" to discuss if the heavily mutated strain will become a variant of interest or a variant of concern.

Light volume may be exacerbating the steep drop on Wall Street, as some traders remain away from their desks ahead of an early close by the markets.

A lack of major U.S. economic data may also be keeping traders on the sidelines ahead of next week's closely watched monthly jobs report.

Airline stocks have moved sharply lower amid concerns about new travel restrictions, resulting in a 8.7 percent nosedive by the NYSE Arca Airline Index. The index has plummeted to its lowest intraday level in a year.

Substantial weakness is also visible among energy stocks, which are plunging along with the price of crude oil. Crude for January delivery is tumbling $6.99 to $71.40 a barrel.

Reflecting the sell-off by energy stocks, the Philadelphia Oil Service Index is down by 7.6 percent, the NYSE Arca Oil Index is down by 6 percent and the NYSE Arca Natural Gas Index is down by 4.3 percent.

Banking stocks are also seeing significant weakness amid a steep drop by treasury yields, with the KBW Bank Index slumping by 4.8 percent to its lowest intraday level in over a month.

Steel, brokerage and tobacco stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Friday. Japan's Nikkei 225 Index plunged by 2.5 percent, while Hong Kong's Hang Seng Index plummeted by 2.7 percent.

The major European markets have also shown significant moves to the downside on the day. While the French CAC 40 Index has shown a 4.2 percent nosedive, the German DAX Index and the U.K.'s FTSE 100 Index are down by 3.3 percent and 3.1 percent, respectively.

In the bond market, treasuries have spiked in reaction to the news of the new covid variant. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 13.1 basis points at 1.514 percent.

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