Dow Plunges Over 1,000 Points During Trading‥NY Stock Market Plummets Vertically on First US Omicron Case

Director Anthony Fauci is announcing the first case of the Omicron variant in the United States during a White House briefing. [Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market plunged, unable to overcome the news of the first U.S. infection of the Omicron COVID-19 variant.

The volatile session, in which the Dow Jones Industrial Average fell nearly 1,000 points from its peak during the day, is making future market outlooks difficult.

On the 1st (local time), the Dow closed down 1.34% at 34,022.04, the S&P 500 fell 1.18% to 4,513.04, and the Nasdaq plunged 1.83% to 15,254.05.

The major indices in the New York stock market started the day on an upward trend. The Dow surpassed 35,000 during the session, and the Nasdaq surged to 15,800, seemingly recovering the previous day's losses, but the news of the first U.S. Omicron variant infection in California triggered a sharp reversal.

As anxiety spread, the VIX, known as the fear index, surged by 16%.

Travel-related stocks led the decline that day. Airlines such as American Airlines, Delta Air Lines, and United Airlines all showed significant drops of over 7%.

Cruise line stocks like Norwegian Cruise Line and Carnival also fell about 7-8%, and hotel chains such as Wynn and Hilton were unable to avoid declines.

Retailers were not spared from the downturn either. Nordstrom fell 5.4%, Kohl's dropped 5.7%, and Best Buy and Macy's each declined by 4%.

Following the Omicron outbreak news, the direction of Treasury yields also changed. The 10-year U.S. Treasury yield approached the 1.5% range in the morning but fell to 1.41% in the afternoon, increasing the possibility of entering the 1.3% range. A decline in Treasury yields means a rise in bond prices.

Federal Reserve Chairman Jerome Powell appeared before Congress for the second consecutive day, stating that the pace of asset purchase tapering should be accelerated and predicting that the expansion of tapering would not harm the market.

The ADP November private employment report released that day exceeded expectations, further increasing the likelihood of an early Fed tapering to address inflation.

Despite the decline in Treasury yields, tech stocks also failed to avoid losses. Apple, which surged 3% the previous day, was rising during the day but closed down 0.3% near the end of trading.

Vaccine maker Moderna's stock fell 11.87% on news of losing a patent lawsuit. Salesforce.com plunged 11.7% after its Q4 earnings forecast was deemed disappointing.

Twitter announced that Ark Investment Management, run by Cathie Wood, purchased 1.1 million shares, but its stock price still fell more than 2%.

Chris Zaccarelli, Chief Investment Officer of Independent Advisor Alliance, explained, "Volatility seems likely to be high in the short term. There is enough reason for investors to engage in indiscriminate panic selling."