On Wall Street, the decline is accelerating, the Omicron variant worries

The facade of the New York Stock Exchange (AFP / Johannes EISELE)

The New York Stock Exchange saw the decline accelerate in the morning, worried about the effectiveness of vaccines and the downside risks associated with the Omicron variant of Covid-19 and after comments from the president of the Fed.

At 4.30 p.m. GMT, the Dow Jones was down 1.49%, the Nasdaq was down 1.48% and the S&P 500 was down 1.45%.

On Monday, Wall Street had partially bounced back from its worst session of the year when the Omicron variant was detected in South Africa.

The Dow Jones index had advanced 0.68% to 35,135.94 points. The technology-dominated Nasdaq gained 1.88% to 15,782.83 points and the extended S&P 500 index 1.32% to 4,655.27 points.

On Tuesday, the fall in stock market indices, already destabilized by the appearance of the Omicron variant, accelerated with the testimony of the boss of the American Central Bank (Fed) before a Senate committee.

Jerome Powell felt the time had come to stop talking about “temporary” inflation in the United States.

“The risks of more persistent inflation have increased,” he said while continuing to consider a faster reduction in asset purchases in order to fight against rising prices.

The Fed chairman also estimated that “the emergence of the Omicron variant posed downside risks to jobs and economic activity and increased uncertainty about inflation”.

Wall Street had already started badly after the statements of the boss of the Moderna laboratory to the Financial Times. Stéphane Bancel estimated that there would be a “significant drop” in the effectiveness of vaccines, faced with the new variant.

“We are in a whirlwind of uncertainty related to the Omicron variant, and this uncertainty creates increased volatility in the market,” comments Patrick O’Hare of Briefing.com.

“The downward trend has its roots in concerns about the effectiveness of current vaccines and the possibility that the Fed has made a monetary policy error,” added the analyst as the central bank gradually reduces its monetary support .

As for indicators, consumer confidence was undermined by inflation in November, according to the Conference Board. The index lost 1.9 points, falling more than expected.

– Restrictions –

Investors were also concerned about the impact of new restrictions on the supply chain, “a valid concern since the variant already restricts movement,” said Chris Low, economist for FHN Financial.

The bond market was favored by investors, with yields on 10-year Treasury bills (which move in the opposite direction to bond prices) falling to 1.46% from 1.50% the day before, a move that reflects the aversion to risk.

The VIX index, also known as the “fear index” because it predicts market volatility, started to rise again.

All sectors of the S&P 500 plunged into the red, from communications (-1.80%) to energy (-1.16%) in the wake of a more than 3% drop in crude prices. .

The titles of pharmaceutical companies accused the blow. Moderna lost 7%. Its rival Pfizer, which said Monday that it had started working on a formulation of its vaccine against the Omicron variant, was doing well (+ 2.33%) but its partner BioNtech dropped 7.32%. Johnson and Johnson, the third largest vaccine manufacturer in the United States, also lost 1.58%.

Equities linked to the travel sector also drank the cup like Expedia (-3.05%), Booking (-3.23%), Marriott International (-1.89%). Airlines and cruise lines were in bad shape like American Airlines (-3.16%), United Airlines (-2.68%) or Carnival (-4.27%).


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On Wall Street, the decline is accelerating, the Omicron variant worries