Thu. Jan 20th, 2022

The U.S. Centers for Disease Control said late Wednesday afternoon that the country had detected its first case of the Omicron variant.

Wall Street closed lower on Wednesday after a morning march faded as investors worried about the latest coronavirus variant and the first evidence of its arrival in the United States, while also echoing Federal Reserve Chairman Jerome Powell’s comments about rising digested inflation.

According to preliminary data, the S&P 500 – a proxy for the health of retirement and college savings accounts – lost 1.18 percent to end at 4,513.04 points, while the Nasdaq Composite 1.83 percent to 15,254.05 lost. The Dow Jones Industrial Average fell 1.34 percent to 34,022.04.

Late in the day, the U.S. Centers for Disease Control said the country had detected its first case of the Omicron variant, which infected a person from South Africa where the variant was initially discovered.

Earlier Wednesday, the Fed’s Powell said policymakers should be ready to respond to the possibility that inflation may not fall in the second half of next year as expected.

Wall Street tumbled on Tuesday after Powell surprised the market by indicating that the central bank would consider accelerating the withdrawal of its bond-buying program at its December meeting amid a surge in inflation.

“The market is grappling with the dual concerns of the Omicron variant, which may or may not evade the vaccine, and a more hawkish Powell than expected,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North -Carolina. .

Wall Street tumbled sharply on Friday when it first heard of the Omicron variant, with health officials saying they have yet to find out how transmissible or dangerous the variant is and how much protection existing vaccines can offer against it.

On Monday, the market recovered sharply as investors searched for bargains after the sale, only to fall again on Tuesday due to the Powell comments.

“We tried again (Wednesday) to buy the dip, but the news that Omicron is already here took some of the wind out of the bulls’ sails,” said Zaccarelli.

While all 11 major S&P sectors increased in the early afternoon, most sectors were negative by the end of the session. The communications services sector was the biggest loser by noon.

Salesforce.com Inc. predicts current quarterly earnings below estimates as it faces stiff competition from competitors, including Microsoft, sending its shares sharply lower.

The World Health Organization said it was expected to have more information on the transmissibility of the Omicron variant within days, and that the agency believed the existing COVID-19 vaccines would work against the variant.

Lauren Goodwin, an economist and portfolio strategist at New York Life Investments, said it was not surprising to see volatility as investors consumed uncertainties, including the lack of information on Omicron and the latest Fed signals.

However, Goodwin also pointed to Wednesday’s positive economic data, which “reminded investors that the economic and corporate background for this market is really strong.”

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