US Stocks Extend Losses As New COVID Variant Threatens Economic Recovery

The S&P 500 Index declined 1.9% while the Dow Jones Industrial Average and Russell 2000 sank at least 2.5%. Travel and leisure stocks tumbled, while stay-at-home shares gained.

U.S. stocks slid as a post-Thanksgiving selloff spread across global markets amid fears a new coronavirus variant identified in South Africa could spark fresh outbreaks and scuttle a fragile economic recovery. Haven assets surged. 

Equity benchmarks dropped across the board, with cyclicals and small-caps taking the brunt of the selling. The S&P 500 Index declined 1.9 per cent while the Dow Jones Industrial Average and Russell 2000 sank at least 2.5 per cent. Travel and leisure stocks tumbled, while stay-at-home shares gained. That helped ease losses in the Nasdaq 100, which was still down 1.5 per cent. 

Treasuries jumped, sending the 10-year yield down 13 basis points, while traders pushed back expectations for rate increases. The Japanese yen emerged as the main haven currency of the day, with the dollar falling. Oil tumbled toward $70 a barrel in New York and gold climbed.

The World Health Organization and scientists in South Africa were said to be working “at lightning speed” to ascertain how quickly the B.1.1.529 variant can spread and whether it's resistant to vaccines. The new threat adds to the wall of worry investors are already contending with in the form of elevated inflation, monetary tightening and slowing growth.