US stocks:Wall Street falls on Omicron worries ahead of Fed meeting

Must read

NEW YORK: Wall Street fell from record highs on Monday, with shares of Carnival Corp and several airlines tumbling as investors worried about the Omicron coronavirus variant ahead of a Federal Reserve meeting later this week.
Travel-related stocks fell, with the fast-spreading variant accounting for around 40% of Covid-19 infections in London and at least one death in the United Kingdom.
Carnival Corp, Norwegian Cruise Line Holdings and Royal Caribbean Cruises all dropped more than 5%, while the S&P 1500 airlines index shed 3.1%.
“It’s transportation, restaurants, all the things that if it got bad enough that we started putting new restrictions on people, it would not be good for them,” said Tom Martin, senior portfolio manager at Globalt Investments in Atlanta. “They have all been bid over the past several months by the idea that we were going to get back to business as usual.”
Seven of the 11 major S&P 500 sector indexes fell, with only defensive sectors, including consumer staples, utilities and real estate gaining.
The CBOE Market Volatility index, a gauge for investor anxiety, was up 1.75 points.
In afternoon trading, the Dow Jones Industrial Average was down 0.7% at 35,720.1 points, while the S&P 500 lost 0.63% to 4,682.38.
The Nasdaq Composite dropped 1% to 15,474.32.
Apple Inc dipped 0.7%, even after J.P. Morgan raised its price target on the iPhone maker to the highest on Wall Street. The company is close to becoming the first in the world to hit $3 trillion in market value.
Investors expect an increasingly hawkish tone out of the Federal Reserve’s two-day meeting that wraps up on Wednesday. The US central bank is expected to signal a faster wind-down of asset purchases, which could also usher closer a start to interest rate hikes.
“Everyone is focused on the Fed this week and what guidance we get in terms of bond purchases and interest rates. There’s an expectation that there will be an acceleration of tapering, and there’s a little anxiety leading up to that,” said Ryan Jacob, chief portfolio manager at Jacob Internet Fund.
A Reuters poll of economists sees the central bank hiking key interest rates from near zero to 0.25%-0.50% in the third quarter of next year, followed by another in the fourth quarter.
Positive updates about vaccines and antibody cocktails to combat the new Covid-19 variant, along with a recent reading on inflation that was in line with consensus, pushed the S&P 500 index to a record closing high on Friday.
Pfizer Inc rose about 4% after it agreed to acquire Arena Pharmaceuticals in a $6.7 billion all-cash deal. Arena’s shares surged about 80%.
Declining issues outnumbered advancing ones on the NYSE by a 2.45-to-1 ratio; on Nasdaq, a 2.55-to-1 ratio favored decliners.
The S&P 500 posted 47 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 28 new highs and 286 new lows.

Source link

More articles

- Advertisement -


- Advertisement -

Latest article