Stocks were falling hard as the Covid-19 variant Omicron is spurring new lockdowns in Europe, while the Federal Reserve has made clear that it is quickly removing monetary support. Plus, Sen. Joe Manchin said he wouldn’t support President Joe Biden’s $2 trillion tax-and-spending package.
Futures for the Dow Jones Industrial Average fell 437 points, or 1.2%. Futures for the S&P 500 declined 1.3% and Nasdaq Composite futures were down 1.5%.
“U.S. equity futures are sharply lower with global shares amid negative COVID headlines,” wrote Tom Essaye, founder of Sevens Report Research.
The Netherlands announced new lockdowns on Sunday, while Germany will place a travel ban on people coming into the country from the U.K. Ireland also imposed new lockdowns.
Meanwhile, recent inflation has prompted the Fed to rapidly reduce the tens of billions of dollars of monthly bond purchases to zero soon. The central bank is projected to lift interest rates three times in 2022.
The combination of restrictions and tighter monetary and fiscal policy is stoking fears of a dent to economic activity. Airline stocks tumbled, with Delta Air Lines (ticker: DAL) and United Airlines (UAL) down 3.1% and 3.3%, respectively.
On the U.S. spending bill, Manchin, the West Virginia Democrat, stunned the White House on Sunday after he told Fox News the package was a “no” for him, adding that he couldn’t “vote to continue with this piece of legislation.” The bill, which Senate Democrats had hoped to pass by Christmas, stalled last week after prolonged negotiations between Manchin and Biden.
“I’ve tried everything humanly possible,” Manchin said Sunday. “I can’t get there.”
The S&P 500 is now down 3% from its all-time high, hit on Dec. 10.
The price of WTI crude oil fell more than 4% to below $68 a barrel. The Energy Select Sector SPDR Fund (XLE) fell 3.1%.
Asian shares posted steep losses and European stocks were tumbling. The Stoxx Europe 600 was down 1.5%
Here are five stocks on the move Monday:
Moderna (MRNA) stock gained 8% after the company said Monday that a 50-microgram booster dose of its Covid-19 vaccine increased neutralizing antibody levels against the Omicron variant by about 37-fold.
Biogen (BIIB) stock gained 2.8% after the company announced it cut in half the price of its Alzheimer’s drug aduhelm in order to sell the drug to more people with early signs of the ailment.
AT&T (T) stock rose 1.4% after getting upgraded to Overweight from Equal Weight at Barclays.
SunRun (RUN) stock fell 9% after getting downgraded to Sector Weight from Overweight at KeyBanc Capital Markets.
Canopy Growth (CGC) stock fell 5.5% after getting downgraded to Underweight from Neutral at Piper Sandler.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com and Joe Woelfel at joseph.woelfel@barrons.com
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