Dow tumbles more than 500 points to end a volatile week as COVID rates continue to soar in the US

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Dow tumbles more than 500 points to end a volatile week down 1.7% overall week on week: Omicron spooks market

  • The stock market suffered big losses this week as the Dow Jones Industrial Average dropped by more than 500 points on Friday 
  • The S&P 500 also fell by 1.9 percent this week and the Nasdaq Composite took the biggest hit with a loss of 3 percent
  • The volatile week comes as investors worry about the rise in COVID across the nation and the prominence of the Omicron variant, now confirmed in 42 states
  • Federal Reserve Chairman Jerome Powell also stoked fears in the market after saying tough measures might be required to reign-in inflation










The stock market ended on a low on Friday after an unstable week as traders worried about the impact of COVID-19 infection rates continuing to climb across the nation and the spread of the Omicron variant.

The Dow Jones Industrial Average had dropped 532.20 points, about 1.5 percent, as of closing Friday. It fell at total of 1.7 percent at the end of the week.

The S&P 500 dropped by 1 percent, with a total weekly loss of 1.9 percent, and the Nasdaq Composite ended about 0.1 percent lower after dipping 3 percent this week. 

The uneasy week comes as the U.S. recorded more than 193,000 new COVID cases in the past day and as the Omicron variant has been detected in 42 states as of Friday.  

The S&P 500 and Nasdaq also suffered big losses this Friday and in the past week

The S&P 500 and Nasdaq also suffered big losses this Friday and in the past week

The Dow Jones Industrial Average fell by 532.20 points on Friday, ending a volatile week

The Dow Jones Industrial Average fell by 532.20 points on Friday, ending a volatile week

Wall Street has been in turmoil following a volatile week that ended on more loses on Friday

Wall Street has been in turmoil following a volatile week that ended on more loses on Friday

Tech giants took a big hit as like Microsoft stock fell nearly 5.5 percent and Alphabet and Apple both fell by more than 4 percent this week.  

Economic experts said investors have grown worried over the spread of the Omicron variant. Nationwide, 42 states have now recorded Omicron cases.

The seven-day average positivity rate for New York City, which has been hit the hardest, was 4.69 percent, but the positivity rate doubled in the three days from December 9-12.

The state posted its highest number of cases in a single day – 21,027 – on Thursday, which officials say is driven by the fast-spreading Omicron variant.

The US as a whole as recorded 193,305 new COVID cases this past day, with 2,171 new deaths. 

This past week, the nation confirmed more than 872,000 new cases and more than 9,000 deaths.  

Worries in the market also come as the Federal Reserves consider to reign in the market to tackle rising inflation rates. 

‘As the Federal Reserve turns more hawkish and expectations for higher interest rates rise, investors are lowering exposure to growth stocks,’ Jim Paulsen, chief investment strategist at The Leuthold Group told CNBC.  

‘Typically, growth stocks exhibit a higher duration compared to value stocks because a higher proportion of their cash flows will be received in the more distant future.’ 

Federal Reserve Chairman Jerome Powell admitted that tough measures might be required to reign in inflation, which is not as 'transitory' as he had long asserted

Federal Reserve Chairman Jerome Powell admitted that tough measures might be required to reign in inflation, which is not as ‘transitory’ as he had long asserted

The Consumer Price Index rose 6.2 percent in October 2021 from one year prior

The Consumer Price Index rose 6.2 percent in October 2021 from one year prior

In testimony to Congress, Federal Reserve Chairman Jerome Powell admitted that ‘the risks of higher inflation have moved up’ and signaled that the central bank may finally have to take tough action to tackle rising prices.

Inflation hit 6.2 percent in October, the highest figure since November 1990, and far above the Fed’s two per cent target. 

Economists fear the figure for November – set to be released in the coming days – could soar even higher.

Powell has long insisted that inflation is ‘transitory’ and will soon disappear, and his change of tone panicked investors who fear that an accelerated end to easy money policies will put a damper on high-flying growth stocks.

Last month, the Fed began reducing its purchases of Treasuries and mortgage-backed securities from $120 billion per month at a pace that would put it on track to end purchases by mid-2022. 

The program was introduced in early 2020 to help nurse the economy through the pandemic.

Powell said in his testimony that policymakers would discuss at their December 14-15 meeting whether to accelerate the end to that program in light of the strength of the economy.

That early wind-down would open the door for the Fed to raise short-term interest rates, diluting one of the main reasons for the S&P 500’s more than doubling since late March 2020.

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