The Dow Jones Industrial Average was pummeled on Black Friday as fresh concerns of a new strain of coronavirus from South Africa spooked investors and caused a massive selloff.
At one point during trading, the Dow was down over 1,000 points. (Markets closed at 1 p.m. due to the Thanksgiving holiday.)
The Dow finished down over 900 points, and the Nasdaq and S&P were both down over 2% on the day.
The World Health Organization on Friday assigned the Greek letter Omicron to a newly identified COVID variant in South Africa.
According to CNBC, “Health experts are deeply concerned about the transmissibility of the Omicron variant given that it has an unusual constellation of mutations and a profile that is different from other variants of COVID.”
The stocks that took the biggest hit were travel stocks as governments such as the UK began shutting down air travel from African countries where the new strain is said to have emanated.
The European Union and Israel have already implemented another travel ban following the announcement, and Germany is expected to follow suit later in the day.
In the US, NIH Director Dr. Anthony Fauci said that the US might have to take similar actions but claimed that “we don’t know” yet the severity of the new strain.
Fauci said, “If, in fact, it does evade the vaccines that we’re doing, there’s always the possibility of doing what the UK has done, namely, block travel from South Africa and related countries.”
The World Health Organization held an emergency meeting on Thursday to discuss the latest virus strain but urged caution until more is known about the seriousness of the strain.
WHO COVID-19 expert Maria Van Kerkhove said, “We’re calling a special meeting to discuss this, not to cause alarm, but because we have this system in place.” She added: “We can bring these scientists together and discuss ‘What does it mean?’ and also set the timeline for how long it will take for us to get those answers.”
The new African variant was found in two patient samples taken as early as August and October in Nigeria. However, the seriousness of transmissibility and mortality rates are still not known.
The leader of the African Centers for Disease Control and Prevention, John Nkensgasong, implored people to be patient and to “give us some time…it’s very early.” He added: “It’s a separate lineage from the UK and South Africa.”
However, the call for caution was not heeded by investors who dumped many high-profile shares, fearing the unknown in the coming days.
Travel-related stocks such as Boeing, United Airlines, Delta Airlines, and American airlines all saw shares drop over 10% during trading.
Carnaval Cruise and Norwegian cruises both saw shares fall over 10% as well.
The price of oil has been a hot topic of late, with gas prices rising to a point not seen in years. But fears of a drop in demand caused the price of oil to fall below $70 a barrel, the largest daily drop in price this year.
Pharmaceutical stocks were one of the few industries to benefit from the news, with stocks such as vaccine maker Moderna seeing share prices rise by nearly 30% at one point during trading. Another prominent vaccine maker, Pfizer, also saw substantial gains on the day.
But for the rest of the stock market, it truly was a “black” Friday…and not in the way anyone was hoping.