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Stock Market News for Dec 21, 2021

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Benchmarks recorded a steep decline on Monday as investors worried about the fast-spreading omicron variant of COVID-19, raising doubts on the global economic outlook. Investors also digested news from Senator Joe Manchin that he won’t support the Biden administration’s $1.75 trillion Build Back Better plan.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 433.28 points, or 1.2%, to close at 34,932.16, the lowest since Dec 3. The blue-chip index was led to the negative territory with more than 2.9% loss in shares of The Travelers Companies, Inc. (TRV - Free Report) and Caterpillar Inc. (CAT - Free Report) . The Travelers Companies carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 fell 52.62 points, or 1.1%, to close at 4,568.02 on Monday, its largest one-day point and percentage decline since Dec 1. Of the 11 major sectors of the broader index only the consumer staples and utilities sectors closed in the green. The financials sector fell 1.9%, and the materials sector followed closely with 1.8% decline, while both the consumer discretionary and industrials sector ended 1.7% lower.

The Nasdaq Composite Index closed at 14,980.94, after declining 188.74 points, or 1.2%, its lowest closing value since Oct 15. Peloton Interactive, Inc. (PTON - Free Report) was the biggest decliner falling 8.8% on Monday, while Moderna, Inc. (MRNA - Free Report) slid 6.3% even after the company said that its COVID-19 booster on combination with two vaccines will offer 37-fold protection against the omicron variant.

On Monday, the fear-gauge CBOE Volatility Index (VIX) increased 6%, to close at 22.87. Declining issues outnumbered advancers on the NYSE by a 4.38-to-1 ratio, while a 2.70-to-1 ratio favored decliners on Nasdaq. The S&P 500 recorded two new 52-week highs and 11 lows, while the Nasdaq Composite posted 13 new highs and 346 new lows.

Omicron Overshadowing Holiday Season, Investors Spooked

The S&P 500 tumbled for three straight sessions, in fact its biggest 3-day percent slide since Sep 30, while the fell to its lowest closing level since the beginning of this month and the Nasdaq Composite posted its worst drop since May 12. Overall investors took a hit from the rapid spread of the omicron variant of coronavirus, adding to the bullish sentiments of investors as lockdowns have been initiated in several parts of Europe. So far, the Netherlands initiated another lockdown that will last until mid-January and the World Economic Forum that was due to hold its annual meeting in Davos, Switzerland, also postponed it to summer 2022 from January. While no news of lockdowns has been received from the United Kingdom yet, it hasn’t ruled out chances of tighter holiday season restrictions.

In America, the Biden administration is constantly urging unvaccinated people to get a shot sooner, with Dr. Anthony Fauci stating that he expects record cases of COVID-19 this winter, and urged people to get vaccinated and get boosters dozes.

On the other hand, investors also digested news from Washington, where Democratic Senator from West Virginia Joe Manchin said on Sunday that he won’t support the Biden administration’s “Build Back Better” plan. The Democrats need Manchin’s vote and a tie-breaker from Vice President Kamala Harris. The $1.75 trillion social spendings and climate policy bill’s fate now hangs on Manchin’s decision.

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