Stocks fell on Wall Street Tuesday after the head of a major vaccine maker expressed concern about how effective current jabs will be against the new variant of the coronavirus.
The S&P 500 fell 0.5% as of 10:28 a.m. Eastern. The Dow Jones Industrial Average fell 287 points, or 0.8%, to 34,849 and the Nasdaq was little changed.
Financial companies have some of the biggest losses. Banks fell broadly along with sliding bond yields, which hurts their ability to charge more lucrative interest on loans.
The yield on the 10-year Treasury fell to 1.42% from 1.52% late Monday as investors sought to reduce their exposure to risk. Bank of America fell 1.8% and Discover Financial Services shed 2.9%.
U.S. crude oil prices, which depend on a strong economy, fell 2.8% and weighed down energy stocks. Exxon Mobil fell 1.4%.
The weakness came after Moderna CEO Stephane Bancel told the Financial Times that he expected current vaccines would struggle with the omicron variant. Moderna, along with Pfizer and Johnson & Johnson, make vaccines against COVID-19 that have collectively helped tame the pandemic through 2021 and allowed the global economy to recover. Moderna slumped 5.3%.
That recovery is once again being threatened by a variant of the virus that appears to spread more easily, though much is still unknown about just how much more contagious or dangerous it could be. The economy and markets were hurt by a summer surge of cases from the delta variant, though the impact on the overall recovery wasn’t very big.
Markets in Europe and Asia also fell. Many countries have put up barriers to travel in an effort to stem the spread of the omicron variant, which could also hurt global business. The variant is also raising concerns that problems with global supply chains could be made worse if factories and ports shut down.
Investors are also monitoring the latest round of economic data. The Conference Board reported that consumer confidence fell to a nine-month low in November.
The big economic report this week will be Friday’s U.S. jobs report from the Labor Department. Wall Street will also get an update Friday on the health of the services sector, which represents the bulk of the economy.
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