Wall St ends lower on virus, taper worries

Wall St ends lower on virus, taper worries

Wall Street's main indices closed lower after Federal Reserve chair Jerome Powell signalled the US central bank would consider speeding up its withdrawal of bond purchases as inflation risks increase, piling pressure onto a market already nervous about the latest COVID-19 variant.

In a testimony before the Senate Banking Committee, Powell indicated he no longer considered high inflation as “transitory” and the Fed would revisit the timeline for scaling back its bond-buying program at its next meeting in two weeks.

Powell's comments also prompted speculation among some investors about a potential acceleration in interest rate hikes.

Meanwhile, the market was also left waiting for information about how dangerous the Omicron variant might be, the degree to which current vaccinations could offer protection and the additional restrictions governments might have to impose that could hurt the economy, Luschini said.

The Dow Jones Industrial Average fell 652.22 points, or 1.86 per cent, to 34,483.72, the S&P 500 lost 88.27 points, or 1.90 per cent, to 4,567 and the Nasdaq Composite dropped 245.14 points, or 1.55 per cent, to 15,537.69.

For the month, the S&P registered a decline of 0.8 per cent, while the Dow dropped 3.7 per cent and the Nasdaq eked out a 0.25 per cent gain.

Only seven of the benchmark S&P 500 components gained ground on Tuesday.

For the day, all the 11 major S&P industry sectors fell with seven of those sectors falling more than two per cent. Communication services led the losses with a three per cent drop followed by Utilities' 2.9 per cent drop. As oil prices tumbled, energy were under pressure throughout the session, closing down 2.5 per cent.

The top performer was information technology, falling just 0.96 per cent, with help from Apple Inc, which boasted a recording closing high and a 3.2 per cent gain for the day.

Tuesday's decline was a sharp reversal after Monday's rally in which stocks regained some ground they had lost on Friday when the market sold-off swiftly on news of the virus variant.

While the Food and Drug Administration said it hopes to have information about the effectiveness of current COVID-19 vaccines against Omicron, vaccine companies were divided.

Moderna shares fell 4.4 per cent while Regeneron Pharmaceuticals Inc lost 2.7 per cent after it said its COVID-19 antibody treatment and other similar drugs could be less effective against Omicron.

Travel and leisure stocks slumped, with the S&P 1500 Hotels, Restaurant and Leisure indices fell more than two per cent while the S&P 1500 Airlines index lost 0.6 per cent.

The small-cap Russell 2000 index fell 1.9 per cent.

Meanwhile, data showed US consumer confidence slipped in November amid concerns about the rising cost of living and relentless COVID-19 pandemic.

Declining issues outnumbered advancing ones on the NYSE by a 3.82-to-1 ratio; on Nasdaq, a 2.40-to-1 ratio favoured decliners.

The S&P 500 posted seven new 52-week highs and 45 new lows; the Nasdaq Composite recorded 28 new highs and 572 new lows.

Tuesday registered the highest volume trading session for US exchanges since June with 16.13 billion shares changing hands, compared with the 11.12 billion moving average for the last 20 sessions.

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