Futures slump on fresh Omicron worries after vaccine warning

[November 30, 2021]  By Devik Jain and Ambar Warrick

(Reuters) - U.S. stock index futures fell sharply on Tuesday after a warning from vaccine maker Moderna's chief executive on the effectiveness of COVID-19 shots against the Omicron variant hammered travel, energy and banking shares.

Global equity markets tumbled after Stéphane Bancel also told the Financial Times that it was likely the current crop of vaccines would need to be modified.

Adding to the fears, Regeneron Pharmaceuticals Inc said prior analyses suggested its COVID-19 antibody drug could have reduced activity against the Omicron variant.

Occidental Petroleum led losses among energy shares, down 3.8%, as oil prices slumped more than 3% on demand concerns. [O/R]

Major Wall Street lenders sank more than 2%, tracking a dip in Treasury yields as safe haven demand kept bond buying high. Bank of America Corp was the biggest loser among peers, down 2.5%. [US/]

American Airlines Group fell the most among airline stocks, down between 1.3% and 3.5%. Cruise operators Carnival Corp and Norwegian Cruise Line dropped about 3.8% each.
 

Wall Street's main indexes rebounded on Monday from Friday's deep sell-off, as investors were hopeful that the Omicron coronavirus variant would not lead to lockdowns after reassurances from U.S. President Joe Biden.

Uncertainty about the new variant has triggered fresh alarm at a time when supply chain logjams are weighing on economic recovery and global central banks are contemplating a return to pre-pandemic monetary policy to tackle a surge in inflation.

A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

At 6:11 a.m. ET, Dow e-minis were down 458 points, or 1.31%, S&P 500 e-minis were down 49.75 points, or 1.07%, and Nasdaq 100 e-minis were down 89 points, or 0.54%.

Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell are due to testify before the U.S. Senate Banking Committee at 10 a.m. EST (1500 GMT) to discuss the economic recovery from the pandemic.

In his prepared testimony, Powell said he continues to expect inflation to recede over the next year, but warned that the new strain of COVID-19 muddies the outlook, and prices could continue to rise for longer than earlier thought.

Focus will also be on November readings on Chicago PMI and consumer confidence data due later in the day.

Bucking the trend, stay-at-home stocks, which benefited the most during the lockdown, such as Netflix Inc, Teladoc Health, Peloton Interactive and Zoom Video Communications rose between 0.5% and 2.2%.

(Reporting by Devik Jain and Ambar Warrick in Bengaluru; Editing by Sriraj Kalluvila)

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