A holiday-shortened trading day on Wall Street couldn’t keep bears from rampaging, as the Dow Jones Industrial Average dropped 905.04 points in its worst single outing of 2021.
The major index closed the day at 34,899.34, off 2.5%, its biggest decline since October 28, 2020, with news of a new variant of Covid the main culprit. The S&P and Nasdaq each slipped more than 2%, with the performance of the three major indices combining for the worst Black Friday for the stock market since 1950.
The World Health Organization has labeled a new strand of Covid a “variant of concern” and the U.S. restricted travel from eight African countries. The variant was first discovered in South Africa.
Because of Thanksgiving, the stock market closed at 1 p.m. ET, while the bond market stayed open a bit longer. Regular trading hours will resume Monday.
Trading volume was average and the pain was spread fairly evenly among companies in the media and entertainment sector. Netflix was among the companies able to buck the downturn, with its shares climbing 1% to $665.64. Roku, another streaming stock, gained almost 2% to $235.16. Companies with more exposure to Covid had a much tougher go, especially movie theater chains. AMC shares surrendered 3%, while Cinemark dipped 5%. Imax, which had been on an upswing in recent months, declined 7%.
While investors continue to fret about macroeconomic factors like inflation and monetary policy, they had largely gotten past anxiety over Covid. Large swaths of the travel and leisure business have staged a return this year, while pandemic darlings like Zoom and Peloton have fallen out of favor. Even after today’s selloff, the Dow has risen 12% in 2021 to date, while the tech-heavy Nasdaq is up 17%.
Major airlines Delta, United and American each saw their shares plunge more than 8% on today’s news.
