Dow Futures Sink 800 Points, Oil and Bond Yields Fall Amid New Covid Fears—and What Else Is Happening in the Stock Market Today

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The low trading volume due to Thanksgiving can increase volatility.

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Stock and oil prices were falling around the world on Friday, as fears about a new, heavily mutated version of Covid-19 shook markets and shook investor confidence.

Trading volumes were lower in the US due to the extended Thanksgiving holiday, which may have contributed to volatility.

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Futures for the Dow Jones Industrial Average indicated that the index opened more than 800 points, or nearly 2.5% lower, after closing 9 points lower at 35,804 on Wednesday. Futures for the S&P 500 and Nasdaq also fell sharply.

Overseas, Hong Kong’s Hang Seng index fell 2.7% and the pan-European Stokes 600 dropped 3.5%.

US stock and bond markets were closed for the Thanksgiving holiday on Thursday and will trade in the shorter hours on Friday.

Concerns about a new, heavily mutated version of COVID-19 identified in South Africa have rocked markets. Investors’ fears about the pandemic had largely been dispelled in recent months, but came into focus again last week amid a surge of cases in Europe and the latest news from this edition.

Stocks were sharply lower, oil prices have fallen nearly 5% – with futures for the international benchmark Brent crude below $77 a barrel – and bond yields have slipped. The yield on the benchmark 10-year US Treasury note had fallen to 1.53% after closing at 1.63% on Wednesday.

The variant was first identified in Botswana. South Africa’s health minister has said that the b.1.1529 Covid-19 variant is of “grave concern” and a virologist at the Imperial College’s Department of Infectious Diseases Called its spike profile “terrible”. Most vaccines target the variant’s spike protein.

So far only about 60 cases have been identified in South Africa, as well as Hong Kong and Botswana.

The World Health Organization is set to meet on Friday to decide whether B 1.1.529 is a type of interest or a type of concern. Concerns about the variant have already triggered new travel restrictions, with Britain adding South Africa and five other countries in the region to its “red” list.

“A lot of eyes will be on how serious it is and whether it leads to avoidance of vaccines altogether. Little is known at this stage,” said Jim Reid, a strategist at Deutsche Bank. “Suffice it to say at this stage no one in the markets will know which way it will go.”

Michael Hewson, an analyst at broker CMC Markets, said that “as a result of the US holiday, trading in Asia tends to react with thinner levels of liquidity, with bonds rising, yields declining, and gold higher.”

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