Wall Street was crunched in the final 90 minutes or so of trading by news that the US had its first case of Covid Omicron – in San Francisco.
It was news that hit an already unsteady Wall Street and commodities, flattening them as markets traded through a 1,000-point range for the Dow and the Nasdaq swung through a massive range of 3.8%.
The major indices – the Dow, S&P 500 and Nasdaq rapidly reversed, giving up solid gains after the Centers for Disease Control and Prevention confirmed the first case of omicron in the US.
US officials said the first case is double vaccinated and has mild Covid-like symptoms. The patient was otherwise healthy when they returned to the San Francisco Bay area from traveling in South Africa on November 22, developed symptoms three days later and tested positive for Covid on November 29, according to media reports from California.
The Dow fell 461.68 points to 34,022.04, after being up more than 520 points at the high of the day. The S&P 500 lost nearly 1.2% to end at 4,513.04. The Nasdaq Composite dropped 1.8% to 15,254.05 after rising as much as 1.8% earlier in the session.
The late sell off pushed the overnight ASX futures market into the red by around 79 points after being in the green earlier in the session.
The news came well after European markets had closed, so the sell off will impact trading in Asia and into Europe tonight.
The key US 10-year Treasury bond saw its yield rise by 9 basis points to around 1.5% earlier in the session on Wednesday but later retreated to around 1.41% as news of the first case spread rapidly.
Wednesday’s moves continue a volatile streak of the last four sessions as the Omicron threat emerged and suggests markets are falling back into the pattern of the first wave of the pandemic in the March quarter of 2020 – jumping at shadows every time there is bad news and rallying weakly as relief bounces.
The battering on Wall Street was widespread – Travel stocks were the biggest losers as American Airlines fell nearly 8%, Delta Air Lines dropped 7.3%, and United Airlines slipped 7.5%. Aerospace manufacturer Boeing lost 4.8%.
In the cruise business, Norwegian Cruise Line Holdings and Carnival dropped by 8.8% and 7%, respectively. Casino group Wynn Resorts fell 6.1% and Hilton Worldwide ended the day nearly 4% lower.
Retailers were also hit. Nordstrom closed down 5.3% and Kohl’s lost 5.6%. Best Buy and Macy’s dropped 4.3% and 4.6%, respectively. Walmart shares slumped nearly 2.5% as it joined the long list of losers.
Apple shares fell 0.32% – the stand out rise the day before didn’t last. Amazon lost 1.8%, Meta (Facebook) nearly 4.3%, Netflix lost 3.7% and Alphabet and Microsoft shares were also lower at the close with falls of up to 0.6%.
The US dollar jumped in the late sell off, sending the Aussie dollar down more than a third of a cent to just over 71 US cents, where it finished on Tuesday.
Oil, copper and silver sold off as well.
Oil settled lower at $US66.18 a barrel and then lost more than 80 cents in the final minutes of uS trading and as Asia opened for the day.
Oil has the OPEC+ group decision on adding 400,000 barrels a day to global production ahead Thursday and few analysts expected the group to agree to such a movie given the current uncertainty.
Gold, though, jumped $US8 an ounce after settling at $US1,776.50 an ounce to trade around $US1,784 in early Asian dealings Thursday morning.
