The Dow dragged Wall Street’s main indexes lower on Friday, with travel, bank and commodity-linked stocks bearing the brunt of a sell-off triggered by the discovery of a new and possibly vaccine-resistant coronavirus variant.
Cruise operators Carnival Corp, Royal Caribbean Cruises and Norwegian Cruise Line plunged more than 9% each, while shares in United Airlines, Delta Air Lines and American Airlines slumped almost 10%.
Ten of the 11 major S&P sectors dropped in early trading, with energy sliding 6.3% followed by financials and industrials.
The domestically focused Russell 2000 small-cap index tumbled 3.6%, hitting its lowest level in over four weeks.
The S&P 500 banks index dived 5.1% as investors pared back bets of faster U.S. interest rate hikes.
Global stock markets sold off sharply after reports that the new variant was detected in South Africa, with scientists saying it has an unusual combination of mutations, may be able to evade immune responses and could be more transmissible.
The European Union, Britain and India were among places to announce stricter border controls. A top U.S. infectious disease official said a ban on flights from southern Africa was a possibility.
“Equities are reacting negatively because it is unknown at this point to what degree the vaccines will be effective against the new strain, and thus it increases risk of new lockdowns which leads to an economic hit,” said Peter Garnry, head of equity strategy at Saxo Bank.
At 10:06 a.m. ET, the Dow Jones Industrial Average was down 906.49 points, or 2.53%, at 34,897.89, tracking its worst day since late October 2020.
The S&P 500 was down 86.05 points, or 1.83%, at 4,615.41 and the Nasdaq Composite was down 214.71 points, or 1.36%, at 15,630.52.
The CBOE volatility index, popularly known as Wall Street’s fear gauge, jumped to its highest level since Sept. 20.
Elevated U.S. inflation, coupled with strong economic data and the renomination of Jerome Powell as the Fed chair by President Joe Biden, had…