4.05pm: Dow tumbles more 400 points
US stocks finished the trading session sharply lower on investor jitters about the economic impact of the surging Omicron variant as well as Senator Joe Manchin's rejection of President Biden's $1.75 trillion Build Back Better bill.
At the close, the Dow fell 433 points to 34,932, while the S&P 500 eased 53 points at 4,568 and the tech-heavy Nasdaq slipped 189 points to 14,981.
Energy, financial, and hospitality stocks were among the biggest decliners on the day.
1.15pm: US stocks and oil prices tumble on new pandemic curbs
The Dow Jones Industrial Average fell nearly 660 points as investors worried that a rise in Omicron Covid-19 cases would stall economic growth and add pressure to inflation.
Some countries like Israel and Netherlands are imposing restrictions to stem the spread of the Omicron variant as the holiday season starts. Israel said this week that it would ban its citizens from traveling to the US and Canada. The Netherlands entered a strict new lockdown Sunday with all nonessential shops, bars and restaurants closed until mid-January.
The Dow was down 1.9% in midday trading, while the S&P 500 slid 1.8%. Meanwhile, the technology-focused Nasdaq Composite lost 260 points, or 1.7% to 14,908.78.
Oil prices and bond yields tumbled as investors reassessed the prospects for near-term economic growth and fled for assets perceived as safe havens.
“The clock is ticking down towards Christmas but there’s still no sign of a Santa rally. The macro backdrop isn’t particularly appealing, thanks to the rising numbers of Omicron cases that threatens to bring back tighter restrictions in both the UK and the US, thus hitting earnings in the crucial Christmas and New Year periods,” said Chris Beauchamp, Chief Market Analyst at online trading platform IG.
“In addition, the Build Back Better programme in the US needs to find some firmer foundations, as Senator Manchin pulls out of the deal and leaves Biden without the needed votes to carry the day.”
Given all this, it is not surprising that many investors continue to cut back market exposure ahead of year-end.
“Admittedly some will be tempted to jump back in, but the prevailing thin liquidity, which will only get worse from here, means it is not a particularly auspicious time to go dip buying,” added Beauchamp.
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9.50am: US shares tank at open
US shares started on the backfoot on Monday, with the Dow Jones Industrial Average tanking 1.37%, as traders around the world fretted about the Omicron variant.
The Dow Jones fell 490 points at 34,874 in early deals in New York.
The S&P 500 fell over 53 points at 4,567, while the tech-heavy Nasdaq lost around 184 points to stand at 14,985.
The variant of the coronavirus (COVID-19) disease is now ripping across the globe, with its affects on growth and economies as yet something of an unknown, while some countries impose further lockdowns and some consider tightening societal restrictions.
The strain has now been found identified via testing in 43 out of 50 USA states and around 90 countries, and the number of cases is doubling in 1.5 to 3 days in areas with community transmission, according to the World Health Organization (WHO).
Oil firms were among the big losers as US crude (WTI) fell over 4.4% to US$67.71 a barrel.
Fawad Razaqzada, analyst at thinkmarkets.com, said: "The week ahead is going to be rather quiet from a macro point of view, with only a handful of scheduled events to look forward to.
"Traders’ plans to slowly unwind ahead of the festive period have well and truly been ruined," he added.
"The question of how tighter monetary policy will play out on overvalued technology stocks will be a major talking point in the weeks to come, but right now it is all about coronavirus as omicron continues to spread like wildfires."
6.50am: US stocks set for drop
US stocks look set to drop at the start of the final fore-shortened trading week before Christmas as investors worry that a rise in Omicron variant coronavirus (COVID-19) cases will weigh on economic recovery after last week's moves by central banks to dial-down stimulus.
Futures for the Dow Jones Industrial Average shed 1.3%, while those for the S&P 500 fell 1.3%, and contracts for the tech-focused Nasdaq-100 dropped 1.5%.
Stock futures pared some earlier losses after drugs firm Moderna said a third dose of its COVID-19 vaccine increased immune responses against Omicron compared with two doses in lab tests, signaling the shot could still offer protection. Moderna shares jumped more than 5% pre-market.
Some countries are imposing restrictions to stem the spread of the Omicron variant as the holiday season starts. The Netherlands on Sunday reimposed a lockdown, with all nonessential shops, bars and restaurants closed until mid-January.
President Joe Biden plans to deliver an update Tuesday on the fight against COVID-19 in the US, where cases are rising.
Also weighing on sentiment, was news that Democrat senator Joe Manchin has said he would oppose his party’s roughly $2 trillion education, healthcare and climate package.
Oil prices fell amid concerns that the spread of the Omicron variant could hurt global economic growth and impact demand.
After getting hammered when the pandemic began, global oil demand has recovered this year but still remains about two million barrels a day short of its pre-pandemic level of almost 101 million barrels a day, according to the International Energy Agency.