Salem Radio Network News Friday, January 28, 2022


New coronavirus variant fears knock 2% off Dow futures

By Medha Singh

(Reuters) – U.S. stock index futures slumped on Friday, with travel, bank and commodity-linked stocks bearing the brunt of the selloff, as the discovery of a new and possibly vaccine-resistant coronavirus variant spooked investors ahead of a short trading session.

Stocks of major airline operators dropped between 5% and 6% in premarket trading, as the new variant detected in South Africa prompted the European Union, Britain and India among others to announce stricter border controls.

Cruise operators Carnival Corp and Royal Caribbean Cruises plunged about 9% each.

Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co, Goldman Sachs, Wells Fargo & Co and Morgan Stanley fell between 3% and 4% as traders pared back their recent bets on interest rate hikes.

Stronger-than-anticipated U.S. inflation and expectations that Jerome Powell was the more hawkish choice for Fed chair had firmed bets that the central bank is likely to raise rates several times next year, knocking U.S. stocks off their record levels this week.

“Investors don’t know whether the equities could survive to another economic hit with less support from the central banks, as central banks would have to deal with a dual fight that’s intensifying on both fronts: inflation is rising, and COVID news are getting worrisome,” said Ipek Ozkardeskaya, senior analyst at Swissquote.

“The problem is that they can’t use the same tools to fight back inflation and the economic slowdown. And the choice will be difficult.”

The CBOE volatility index, popularly known as Wall Street’s fear gauge, jumped to its highest level since Sept 20.

At 5:45 a.m. ET, futures tracking the domestically-focused Russell 2000 small-cap index tumbled 4.4%, looking at its worst day since June 2020.

Dow e-minis were down 823 points, or 2.3% and S&P 500 e-minis were down 87.5 points, or 1.86%.

Nasdaq 100 e-minis were down 196.5 points, or 1.2%, faring better in comparison as “stay-at-home-winners” such as Netflix Inc, Peloton Interactive and Zoom Video Communications, which saw a tremendous increase in demand during last year’s COVID-19 lockdowns, jumped between 1% and 9%.

Oil majors Exxon Mobil Corp and Chevron Corp dropped 6% and 5% respectively, as oil prices tumbled. [O/R]

In a bright spot, some vaccine makers including Pfizer Inc and partner BioNTech SE as well as Moderna Inc climbed between 5% and 7%.

Trading volume is expected to be light in the short trading session as markets close at 1:00 p.m. ET, a day after the Thanksgiving holiday.

(Reporting by Medha Singh in Bengaluru; Editing by Maju Samuel)


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