Stocks sink on new Covid variant; Dow loses 905 points

NEW YORK (AP) — Stocks are closing sharply lower on Wall Street Friday, after a coronavirus variant from South Africa appeared to be spreading across the globe and the European Union proposed suspending air travel from southern Africa. The Dow Jones Industrial Average lost 905 points.

The S&P 500 was down 2.3%, on pace for its worst day since February. Airlines and other travel stocks sank as health officials in Europe and the U.K. moved quickly to propose suspending air travel from southern Africa. The price of oil fell more than 13% amid worries of another slowdown in the global economy.

The blue chips were down 950 points by midday trading to 34,857. The Nasdaq Composite was down 2%.

"Investors are likely to shoot first and ask questions later until more is known," Jeffrey Halley of Oanda said in a report. That was evident from the action in the bond market, where the yield on the 10-year Treasury note fell to 1.51% from 1.64% on Wednesday. As a result, banks took some of the heaviest losses. JPMorgan Chase dropped 4%.

There have been other variants of the coronavirus — the delta variant devastated much of the U.S. throughout the summer — and investors, public officials and the general public are jittery about any new variant that's spreading. It's been nearly two years since Covid-19 emerged, killing more than 5 million people around the globe so far.

Health officials in Europe and the U.K. moved quickly to propose suspending air travel from southern Africa. Meanwhile cases of the variant were found in Hong Kong, Belgium and Tel Aviv as well as major South African cities like Johannesburg.

The economic impacts of this variant are already being felt. Flights between South Africa and Europe were being subject to quarantine or being shut down altogether. Airline stocks were quickly sold off, with Delta Air Lines, United Airlines and American Airlines falling more than 10% each.

A sign of how fearful Wall Street has become was the VIX, the market's measurement of volatility that is sometimes referred to as the market's "fear gauge." The VIX jumped 49% to a reading of 27.75, its highest reading since January before the vaccines began to be widely distributed.