- The Dow industrials tumbled 905 points in a shortened session Friday.
- A new strain of coronavirus discovered in South Africa prompted travel restrictions worldwide.
- Scientists says the variant appears heavily mutated.
US stocks closed sharply lower Friday as investors moved out of risk assets after rapidly rising cases of coronavirus from a new strain drove worries that the pandemic would throw the global economy off its course of recovery.
Wall Street's key benchmarks had an ugly Black Friday, with the Dow Jones Industrial Average down by over 900 points in a shortened trading session. Trading closed at 1 p.m. Eastern following Thursday's holiday closure.
US investors returned from Thanksgiving to see travel restrictions being put in place worldwide because of a variant of coronavirus called B.1.1.529 that appears to be spreading from South Africa. The World Health Organization on Friday held a special meeting, saying not much is known about the variant yet.
Here's where US indexes stood at 4:00 p.m. on Friday:
- S&P 500: 4,594.62, down 2.27%
- Dow Jones Industrial Average: 34,899.34, down 2.53% (905.04 points)
- Nasdaq Composite: 15,491.66, down 2.23%
"What we do know is that this variant has a large number of mutations. And the concern is that when you have so many mutations, it can have an impact on how the virus behaves," said Dr. Maria Van Kerkhove, the WHO's technical lead on COVID-19, in a live streamed update.
"We believe that Covid-19 is still the chief investor narrative, with outsized pandemic developments driving investor sentiment. And this sentiment is steering kitchen table conversations and, ultimately, consumer buying and the timing of the economic recovery," Greg Bassuk, CEO at AXS Investments, told Insider in a note Friday.
"2021 has seen multiple factors sparking market moves, such as corporate earnings, key economic data, inflation fears and Fed policy. But changes in the course of Covid containment, such as the emergence of the Delta variant and this latest South Africa variant, have eclipsed the other factors to a substantial degree," he said.
The European Union, the UK, Japan and other countries issued travel restrictions from South Africa as well as from neighboring countries, sending travel stocks sliding including United Air Lines and cruises operator Carnival. Meanwhile, shares of vaccine makers and stay-at-home stock plays spiked.
Around the markets, gold reversed course and fell 0.2% to $1,787.89 per ounce. The 10-year yield dropped 9 basis points to 1.504%.
Oil prices tumbled, with West Texas Intermediate crude off by 11% at $69.43 per barrel.
Bitcoin fell by 7.5% to $54,525.73.
