A global sell-off spread to Wall Street Monday as investors got hit by a double whammy that raised concerns about the economic recovery: countries tightening restrictions sparked by the fast spread of the Omicron variant and a potentially devastating setback to President Joe Biden’s social spending bill.
That drove some economists to lower their growth forecasts for next year.
Economically-sensitive sectors such as financials and materials stock took the biggest hit in an across-the-board sell-off.
The Dow lost more than 430 points. The S&P 500 retreated more than 1%. And the Nasdaq shed one-and-a-quarter percent.
Barrington Asset Management Chief Investment Officer Amy Kong expects the economy will hit the brakes.
“We do not expect the US to shut down. We do think, though, obviously it will slow down, which is expected given that we are now a full year plus into this recovery with vaccines announced being announced. And so going into next year where we we saw 6%, maybe five and a half 6% of growth going into, you know, 2021. We probably would expect maybe 3% two and a half 3% going into 2022.”
Even positive news on booster vaccines couldn’t give the market a shot in the arm. Moderna shares jumped at the open but reversed course to end down over 6%. The drug maker said lab tests showed its COVID-19 booster shot appeared to work against the Omicron variant.
Shares of Oracle fell after the software maker said it’s buying healthcare IT giant Cerner for $28 billion. The move could lure more healthcare clients to Oracle's cloud platform.
Wall Street will soon say good-bye to one of its biggest bulls. Abby Joseph Cohen will retire at year’s end. Goldman Sach’s senior investment strategist was one of the faces of the 1990s bull market with her upbeat stock market forecasts.