U.S. stocks sink as U.K. coronavirus mutation sparks alarm
“The precautions required to assess the potential harm of the new Covid-19 strain will undoubtedly introduce additional risk to markets, which expected a smooth return to normal life following the vaccine’s rollout,” James McDonald, chief executive and chief investment officer of Hercules Investments, said Monday in comments emailed to The Post.
European markets plummeted on the news. The benchmark Stoxx 600 index declined 2.7 percent in midday trading, while France’s CAC 40 and Germany’s DAX both slumped nearly 3 percent. The U.K.’s FTSE 100 index declined 2.5 percent.
U.S. stock futures whipsawed in premarket trading, and the Dow Jones industrial average fell 275 points, just shy of 1 percent, at the opening bell. The S&P 500 index shed 1.1 percent and the Nasdaq 100 lost 0.9 percent.
U.K. health officials have said the variant first identified there was spreading 70 percent faster than other strains. The variant has now been found in Australia, Denmark, the Netherlands, Italy and South Africa. But U.S. public health experts and federal officials say that while this strain is fast-spreading, it might not be any more dangerous than others already detected.
There is no evidence yet that the mutation could require changes to coronavirus vaccines, experts say, but investors still are thrown by the prospect of another major setback on the road to recovery. Despite the catastrophic impacts of the pandemic’s first wave, stock markets have hovered near or at record highs for weeks even as U.S. coronavirus deaths have soared past 317,000 and the economy shows signs of slowing.
“We should keep in mind how far we’ve come,” Chris Larkin, managing director of trading at E-Trade, said in comments emailed to The Post. “If the year had ended Friday, [the S&P’s] annual return would have been 14.8% — placing it comfortably in the top half of yearly gains since 1960. Not bad, considering the SPX was down 32% on the year in March.”
The prevailing unease was reflect in oil markets Monday, where the revival of European travel restrictions sparked fears of another broader lockdown. Brent crude, the global oil benchmark sank, 4.1 percent to trade at $50.10 per barrel. West Texas Intermediate crude, the U.S. benchmark, fell 4.2 percent to trade at $47.04 per barrel.
“Crude prices plummeted as a fast-spreading variant of the coronavirus emerging from the UK would cripple all travel across Europe and the US,” Ed Moya, senior market analyst at OANDA, said Monday in comments emailed to The Post. “The short-term crude demand outlook just got dealt a massive blow that will provide added uncertainty over the next couple of months. ”
