[Asia Economy New York=Correspondent Baek Jong-min] The major indices of the New York stock market fell for the third consecutive day, unable to overcome the fear of the spread of the Omicron variant.
On the 20th (local time), the Dow Jones Industrial Average fell 433.28 points (1.23%) to close at 34,932.16, the S&P 500 index dropped 52.62 points (1.14%) to 4,568.02, and the Nasdaq index declined 188.74 points (1.24%) to finish at 14,980.94.
Instead of the anticipated Santa rally ahead of Christmas and the year-end, a fear rally suddenly struck the market.
As European countries expanded lockdown measures to curb the spread of Omicron, investor sentiment was significantly dampened.
The fact that the social infrastructure bill pushed by U.S. President Joe Biden was effectively on the brink of collapse was also negative.
Electric vehicle companies such as Tesla and Rivian, as well as solar power-related firms expected to benefit from the social infrastructure bill, all plunged. Tesla fell to the $800 range, becoming the so-called '800-sla.'
The market also viewed negatively China's decision to cut the Loan Prime Rate (LPR), which serves as the benchmark interest rate, from 3.85% to 3.80%, a 0.05 percentage point reduction. Concerns were raised that this could be a prelude to a global economic downturn, including in China.
As anxiety spread, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as the 'fear index,' rose 1.30 points (6.03%) to 22.87.
The U.S. 10-year Treasury yield, reflecting a flight to safe assets, reached 1.39% during the session but recovered to the 1.4% range in the afternoon. Although Treasury yields rose slightly, bank stocks could not avoid declines. JP Morgan and Goldman Sachs were all weak.
Oil prices also fell sharply, with West Texas Intermediate (WTI) crude closing down 3.7%. The intraday drop in WTI reached 6%.
Moderna announced that its booster shot increases neutralizing antibodies against the Omicron variant by 37 times compared to the second dose level, causing its stock to rise nearly 10% early in the session but then reverse to close down 6%.
Cryptocurrencies remained flat. Bitcoin rose 0.07% to recover to the $47,000 level, and Ethereum increased by 0.09%.
Jim Paulsen, Chief Investment Strategist at Roy Holt Group, explained, "With the combined impact of the Omicron spread and the crisis of the social infrastructure investment bill's collapse, the S&P 500 index broke below its 50-day moving average."
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