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byline, WASHINGTON dateline)
* European shares on track for worst sell-off in a year
* Companies benefiting from economic reopening tumble in
early
U.S. trading
* Crude prices tumble
By Chris Prentice and Carolyn Cohn
WASHINGTON/LONDON, Nov 26 (Reuters) - U.S. stocks tumbled on
Friday as markets reopened after Thanksgiving, European shares
were poised for their worst sell-off in a year and oil prices
hit two-month lows as fears of a possibly vaccine-resistant
coronavirus variant sent investors scurrying to safe-haven
assets.
The Dow Jones Industrial Average fell 894.01 points,
or 2.5%, to 34,910.37, the S&P 500 lost 82.24 points, or
1.75%, to 4,619.22 and the Nasdaq Composite dropped
216.75 points, or 1.37%, to 15,628.47 by 9:48 a.m. EST (1448
GMT) as U.S. equity markets reopened after Thanksgiving. They
would close early on Friday.
The benchmark STOXX 600 index was down 2.9% after
sliding as much as 3.6% in early trading, while the volatility
gauge for the main stock market hit its highest in
nearly 10 months.
Risk assets and companies benefiting from this year's
economic reopening, including AMC Entertainment, plane
engine maker Rolls Royce, easyJet, United
Airlines and Carnival Corp, all dropped.
"This could be the moment that people look back on as
derailing the economic recovery and rate rises but what we have
is a big insertion of uncertainty rather than something
material," said Peter Rutter, head of equities at Royal London
Asset Management.
Scientists say the variant, detected in South Africa,
Botswana, Israel and Hong Kong, has an unusual combination of
mutations, may be able to evade immune responses and could be
more transmissible.
Britain said it was the most significant variant to date and
was one of several countries to impose travel restrictions on
southern Africa.
The European Commission also said it wanted to consider
suspending travel from countries where the new variant has been
identified, though the World Health Organization (WHO) cautioned
against hastily imposing such restrictions.
"Bottom line is this is showing that COVID is still the
investor narrative, a lot of today’s movement is driven by the
South African variant," said Greg Bassuk, chief executive
officer of AXS Investments in Port Chester, New York.
"We have been talking about four or five factors that have
been driving the last couple of months' activity – inflation
fears, some economic data, Fed policy – but what we have seen
over the last year is that big developments with respect to
COVID really have ended up eclipsing some of those other factors
by a substantial degree and that is what is driving today’s
market activity."
The WHO convened an experts' meeting on Friday to evaluate
whether the new variant is a "variant of concern".
It will take a few weeks to understand the impact of the
variant, a spokesperson said.
Global shares fell 1.81% and were on course
for their worst week since early October.
Malaysian rubber glove maker Supermax, which
soared 1500% during the first wave of the pandemic, leapt 15%.
Germany's DAX lost 2.93% and Britain's FTSE 100
fell 3.08% to its lowest in more than a month.
MSCI's index of Asian shares outside Japan
dropped 2.43%, its sharpest fall since late July. Japan's Nikkei
skidded 2.4%.
In commodities, oil prices plunged as gold prices got a
boost from the move away from riskier assets.
Brent crude was last down 6.9%, at $76.54 a barrel.
U.S. crude was last down 7.6%, at $72.43 per barrel.
Spot gold prices rose 0.50% to $1,797.44 an ounce.
As investors dashed for safe-haven assets, the yen
strengthened 1.58% versus the greenback at 113.53 per dollar,
while sterling was last trading at $1.333, up 0.08% on
the day.
The dollar index fell 0.59%, with the euro up
0.75% at $1.129.
Treasuries Benchmark 10-year notes last rose in
price to yield 1.514%. The 2-year note last rose in
price to yield 0.5078%.
The market swings come against a backdrop of already growing
concern about COVID-19 outbreaks driving restrictions on
movement and activity in Europe and beyond.
Markets had previously been upbeat about the strength of
economic recovery, despite growing inflation fears.
(Additional reporting by Chuck Mikolajczak in New York, Tom
Westbrook in Sydney and Marc Jones, Sujata Rao and Abhinav
Ramnarayan in London; Editing by Mark Potter, Kirsten Donovan
and Nick Macfie)
