Inventory futures fall amid fears of latest Covid variant present in South Africa

Johannes Eisele | AFP | Getty Images

US stocks fell on Friday renewed Covid fears about a new variant found in South Africa.

The Dow Jones Industrial Average lost 800 points, or more than 2%, while the S&P 500 and Nasdaq Composite were down 1.4% and 0.9%, respectively. Friday is a shortened trading day due to the Thanksgiving holiday as U.S. markets close at 1:00 p.m. ET.

The downward movement came after WHO officials on Thursday before a new Covid-19 variant discovered in South Africa. The new variant contains more mutations in the spike protein, the cell-binding component of the virus, than the highly contagious Delta variant. Because of these mutations, scientists fear that vaccine resistance may be increased, although WHO said more research is needed.

the Britain has temporarily suspended flights from six African countries due to the variant. Israel banned travel to multiple countries after reporting a case to a traveler. Two cases have been identified in Hong Kong. Belgium also confirmed a case.

“When I read that there is one [case] in Belgium and one in Botswana, we’ll wake up next week and find one in this country. And I am not going to recommend anyone buy anything today until we are sure it isn’t going to happen and I can’t be sure that it doesn’t, “said CNBC’s Jim Cramer.

Bond prices rose and yields fell in the midst of a flight to safety. The return on the benchmark 10-year US Treasury bond decreased by 13 basis points to 1.511% (1 basis point corresponds to 0.01%). This was a sharp reversal as yields jumped above 1.68% at times earlier in the week. Bond yields move in the opposite direction to prices.

Oil prices also fell US crude oil futures declined 6.2% to $ 73.57 a barrel, while the South African rand fell 1.7% against the greenback to 16.231 a barrel.

The Asian markets were hit hard by Friday trading, with the Japanese Nikkei 225 and Hong Kong Hang Seng indexes each falling more than 2%. Bitcoin fell 8%.

Often referred to as Wall Street’s “fear measure,” the Cboe volatility index rose to 28, its highest level in two months.

Travel-related stocks were hit the hardest as Carnival Corp. and Royal Caribbean both lost more than 10% in pre-opening trading. United Airlines, Delta Air Lines, and American Airlines each fell more than 7%. Boeing lost 6%. Marriott International and Hilton Worldwide were down more than 5%.

Bank stocks fell on fears of a slowdown in economic activity and falling interest rates. Bank of America, Goldman Sachs and Citigroup each lost more than 4%.

Industrials associated with the global economy, led by Caterpillar, fell 3%. Dow Inc. lost 2%.

Chevron lost nearly 5% as energy stocks reacted to the surge in crude oil prices.

On the other hand, investors pushed their way into vaccine manufacturers. The Moderna share gained more than 8%. Pfizer shares were up 5%.

Some of the home games that had risen in the first few months of the pandemic were higher again. Zoom-Video added 9%. Netflix was up 2%.

“It’s important to emphasize that very little is known about this newest strain at this point, including whether it can bypass vaccines or how severe it is compared to other mutations. Therefore, it is difficult to make informed investment decisions at this point. ”Paul Hickey of the Investment Group said in a statement to clients. “Historically, chasing a rally or selling into a sharp decline (especially on a very illiquid trading day) is rarely profitable, but that doesn’t stop a lot of people this morning.”

Several investment professionals told CNBC on Friday that the sell-off could be a buying opportunity.

“Friday is the day after Thanksgiving, probably not that many traders on their desks with an early close today. Therefore, potentially lower liquidity is causing part of the withdrawal, “said Ajene Oden of BNY Mellon Investor Solutions on CNBC’s”Squawk box. ”“ But the reaction we’re seeing is an investor buying opportunity. We have to think long-term. “

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Markets closed for Thanksgiving Thursday, so stocks posted modest gains on Wednesday that dampened the week’s losses for the S&P 500 and Nasdaq Composite. During the holiday weeks, the trading volume tends to be low.

A surge in Treasury yields earlier this week put high-growth stocks under pressure. The Nasdaq is down 1.3% for the week, while the S&P 500 is up less than 0.1% and the Dow is up about 0.6%.

The last few weeks of the year are typically a busy time for the market, with the so-called Santa Claus rally usually bringing happy holidays for Wall Street. The S&P 500 is up 25% since the start of the year.

Friday also marks the unofficial start of the Christmas shopping season as investors look to Black Friday insights to set US consumer sentiment.

Retail executives have been speaking for the past few weeks about how to deal with supply chain issues and inflation. It also remains to be seen whether the discussion of supply chain issues caused consumers to start their Christmas shopping earlier, potentially hurting fourth-quarter sales.

“I wouldn’t be surprised if that was a dynamic around the holiday season,” said Sarah Henry, portfolio manager at Logan Capital Management. She added that her firm was looking for companies with long-term strategic advantages rather than trying to bet on the best Christmas sales results.

There were also several strong economic reports on Wednesday, with personal income and consumer spending higher than expected for October and Initial jobless claims at their lowest level since 1969. Core PCE, the Fed’s preferred inflation meter, remained higher at 4.1%.

No major business news is planned for Friday.

Gasoline futures bounce as a lot of important pipeline stays shutdown following cyberattack

Signage will be displayed on a fence at the Colonial Pipeline Co. Pelham intersection and terminal in Pelham, Alabama, USA on Monday, September 19, 2016.

Luke Sharrett | Bloomberg | Getty Images

Fuel prices rose in stores on Sunday evening as much of one of the largest pipelines in the US remains closed after a year Cybersecurity attack.

Gasoline futures jumped 2% to $ 2,168 a gallon while Heating oil futures rose 1.2% to $ 2.03.

West Texas Intermediate Crude Oil FuturesThe US oil benchmark rose 56 cents to $ 65.46 a barrel. International benchmark Brent crude oil traded at $ 68.95 a barrel, for a profit of 65 cents. Natural gas futures were at $ 2.96 per million British thermal units while

Colonial Pipeline announced Sunday evening that some of its smaller side lines between terminals and delivery points are back online, but the main lines are still down.

“We are in the process of restoring service to other side panels, and will only bring our entire system back online if we believe it is safe and fully comply with all federal regulations,” the company said in a statement.

How quickly service is restored in the pipeline remains the deciding factor. While fuel depots are usually stored for a few days in tank farms, a prolonged outage can lead to an increase in fuel prices.

The Colonial Pipeline, which operates the largest pipeline transporting fuel from the Gulf Coast to the northeast, “suspended all pipeline operations” on Friday evening as a proactive measure following a ransomware cyberattack.

The pipeline is an essential part of the US petroleum infrastructure and transports around 2.5 million barrels of gasoline, diesel fuel, heating oil and jet fuel every day. The pipeline is more than 5,500 miles and carries nearly half of the east coast’s fuel supply. The system also supplies fuel to airports, including in Atlanta and Baltimore.

“Without this there is no transport in the region, so it is important that the pipeline is back on stream as soon as possible,” said Patrick De Haan, Head of Petroleum Analysis at GasBuddy. “The effects will potentially increase exponentially after about day 5,” he added.

President Joe Biden was notified of the pipeline’s closure Saturday morning, and the Department of Homeland Security’s cybersecurity and infrastructure security agency is coordinating with the Colonial Pipeline.

US Secretary of Commerce Gina Raimondo said Sunday that it is “All hands on deck are trying now.”

“We are working closely with the company, state and local authorities to ensure that they are back to normal operations as soon as possible and that there are no disruptions in supply,” she told CBS ‘Face the Nation.

The pipeline failure comes as Americans start traveling again as restrictions are lifted and Covid vaccination rollout accelerates. On Friday, the TSA checked more than 1.7 million passengers, the highest figure in more than a year.

“The colonial outage comes at a critical time for the recovering US economy: the start of the summer driving season,” said ClearView Energy Partners. “Persistent disruption that causes pump prices to rise significantly could increase the prospect of domestic policy intervention,” the company added.

The national average for a gallon of gasoline was $ 2,962 on Sunday, up 60% year over year, according to AAA.

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– CNBC’s Emma Newburger contributed to the coverage.