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Fear of COVID-19 Omicron Variant Pounds Financial Markets

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What You Need to Know

  • The World Health Organization has put the new variant in its top variant tracking category.
  • The omicron variant appears to be spreading rapidly in South Africa.
  • Belgium has confirmed finding the variant in a traveler flying in from Egypt who was tested Monday.

Stock prices plunged today and turmoil in other financial markets rose in response to fears that a fast-spreading COVID-19 variant could lead to a new wave of travel restrictions and social distancing efforts.

A technical advisory group affiliated with the World Health Organization sparked market turmoil by dubbing COVID-19 variant B.1.1.529 the “omicron” variant, and classifying the omicron variant as a “variant of concern.”

The Dow Jones Industrial Average fell 905 points, or 2.53%, to 34,899.34.

The S&P 500 Index fell 2.27%, to 4,594.62.

Travel stocks performed especially poorly. Stocks of companies that have done well during lockdowns, such as Zoom, Moderna and Pfizer, performed well.

Volatility was also high in the bond and commodity markets.

The Omicron Variant

Public health officials have found signs that the omicron variant is spreading rapidly in South Africa.

More on this topic

Belgium today confirmed that it found the variant in a traveler flying in from Egypt who was tested Monday.

The administration of President Joe Biden is imposing new air travel restrictions on visitors from South Africa and neighboring countries. The restrictions are set to take effect Monday.

France, Germany and Italy have also imposed new travel restrictions on South Africa and its neighbors. Travelers who have been in those countries and who can come in must quarantine for 14 days, even if they have been vaccinated.

The Variant Collection

WHO classifies COVID-19 variants as ordinary variants, “variants of interest” and variants of concern.

WHO recommends that public health agencies track variants of interest, but it gives the highest level of attention to the variants of concern.

The other variants of concern have been the alpha variant, the beta variant, the gamma variant and the infamous delta variant, which led to a large wave of U.S. deaths in September.

(Image: Bloomberg)