NEW YORK (Dispatches) - The S&P 500 traded lower in a holiday-shortened trading week on concerns about the potential economic impact of a new coronavirus variant.
On Thursday, the World Health Organization issued warnings about a new, heavily mutated coronavirus variant detected in South Africa. Investors sold risk assets in response to the news, triggering a 1,000-point drop at one point in the Dow Jones Industrial Average and large sell-offs in oil, cryptocurrencies and airline and cruise stocks.
Earlier in the week, U.S. President Joe Biden announced he is nominating Federal Reserve Chairman Jerome Powell for a second term and nominating Fed Governor Lael Brainard as vice chairman. Biden’s decision to keep Powell in the position for another term was widely expected among economists as the Fed navigates a difficult economic environment of labor shortages, supply chain disruptions and elevated inflation.
And also, the White House announced the U.S. will be releasing 50 million barrels of crude oil from its Strategic Petroleum Reserve to help combat rising global energy prices. Crude oil prices and oil stocks initially traded higher following the announcement, but oil prices fell 12% on Friday to the lowest levels since September on concerns the new variant could negatively impact global demand.