New Covid Variant Fears Sink Dow Futures By 800 Points
The new Covid variant found in South Africa has spread fears across U.S. stock futures which plunged 817 points, equivalent to 2.3% on Friday –when markets will close at 1 p.m. ET due to the Thanksgiving holiday. Nasdaq 100 and S&P 500 futures were down 1% and 1.8% respectively.
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New Covid Variant
As reported by CNBC, the new COVID-19 variant found in South Africa is rocking the stock market, as Germany, the U.K. Italy and Singapore have set out to suspend flights from six African countries: Zimbabwe, Botswana, South Africa, Namibia, Lesotho, and Eswatini.
Markets in Asia had a tough Friday as in Japan and Hong Kong, the Nikkei 225 and the Hang Seng index dropped more than 2% each.
“Bond prices rose and yields tumbled amid a flight to safety. The yield on the benchmark U.S. 10-year Treasury note fell 13 basis points to 1.511% (1 basis point equals 0.01%). This was a sharp reversal as yields jumped earlier in the week to above 1.68% at one point. Bond yields move inversely to prices,” the media outlet informs.
The new Covid variant also sent oil prices down as U.S. crude futures shrank by 6.2% to $73.57 per barrel, and the South African rand declined 1.7% against the greenback to 16.231 per dollar.
Stock Impact
The stock of several travel companies took the biggest hits, as Carnival Corp (NYSE:CCL) and Royal Caribbean Cruises Ltd (NYSE:RCL) were down by more than 10% each in premarket trading. Marriott International Inc (NASDAQ:MAR) and Hilton Hotels Corporation (NYSE:HLT) dropped more than 5%.
Airlines’ stock also suffered as Delta Air Lines Inc (NYSE:DAL), United Airlines Holdings Inc (NYSE:UAL), and American Airlines Group Inc (NASDAQ:AAL) all plunged more than 7%.
As shrinking economic activity fears rise, shares of Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), and Goldman Sachs Group Inc (NYSE:GS) sank by 4%.
The plunges come at a time when the U.S. has recorded its lowest new jobless claims since 1969, and inflation hovers at 4.1% –as per the Federal Reserve Core CPE indicator. on the consumer side, personal income and spending grew beyond expectations in October.
Updated on
Source valuewalk
