Dow falls 200 points as vaccine maker warns of diminished effectiveness against Omicron variant
Wang Ying/Xinhua via Getty Images
- US stocks tumbled as investors fear the Omicron variant will derail the global economic recovery.
- Moderna's CEO expressed reservations about the efficacy of his vaccine against the new strain.
- The 10-year Treasury note yield slid to 1.448% from Monday's 1.529%.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell
US stocks tumbled Tuesday, after rebounding the day before, amid renewed fears that the Omicron variant could derail the global economic recovery.
That trepidation was underscored by Moderna's CEO, who expressed reservations about the efficacy of his company's existing vaccine against the new coronavirus strain.
The Dow Jones Industrial Average led the downturn, slipping more than 200 points. The tech-heavy Nasdaq-100 also fell, after closing higher by 2% in the previous session.
Here's where US indexes stood at the 9:30 a.m. ET open on Tuesday:
- S&P 500: 4,630.80, down 0.53%
- Dow Jones Industrial Average: 34,923.75, down 0.60%
- Nasdaq Composite: 15,746.20, down 0.23%
Investors are trying to assess the threat and gravity of Omicron especially as major global economies seem to be on the cusp of a recovery. The strain was deemed a "variant of concern" by the World Health Organization, in part because preliminary evidence suggests it may increase the risk of reinfection with COVID-19.
It did not help that Moderna's boss, Stephane Bancel, told the Financial Times Tuesday "there is no world" in which vaccine effectiveness is the same against Omicron as against the Delta variant. He added that it will likely take months for vaccine-makers to develop and distribute large numbers of effective shots.
Other drugmakers, such as BioNTech, have also thus far not shed much light on the efficacy of their vaccines against Omicron. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, over the weekend warned that the US might enter a fifth wave of infections.
"This whipsaw price action could become a regular feature over the next couple of weeks as information on the variant trickles out," said Craig Erlam, senior market analyst at Oanda. "For now, markets will remain very sensitive to indications that vaccines may not protect us this winter as much as we hoped."
After the Dow plunged 905 points on Friday to its largest Black Friday selloff since 1931, equities bounced back Monday. Many analysts have maintained their relatively upbeat forecasts for stocks.
"The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation," Federal Reserve Chair Jerome Powell said in prepared comments ahead of a Senate appearance Tuesday alongside Treasury Secretary Janet Yellen.
Bond yields, which move inversely to prices, fell with the key 10-year Treasury note yield sliding to 1.448% from Monday's 1.529%.
Oil prices slipped Tuesday, erasing all of the previous day's gains. West Texas Intermediate crude oil slipped 3.12% to $67.77 per barrel. Brent crude, oil's international benchmark, fell 3.26% to $71.03 per barrel.
The Organization of the Petroleum Exporting Countries, due to meet Thursday, is expected to decide whether it will pause supply increases or not.
Gold rose as much as 0.49% to $1,795.76 per ounce.
from Business Insider https://ift.tt/3d5aPNi
No comments