Dow Jones Dives As New Covid Variant Emerges; Moderna Pops; Warren Buffett Stock Rebounds
The Dow Jones Industrial Average suffered its worst day of the year as a new Covid variant spurred a sell-off that scoured global markets. Vaccine plays Moderna (MRNA), Pfizer (PFE) and BioNTech (BNTX) all soared. Meanwhile, Warren Buffett stock Snowflake (SNOW) continued to rebound in the post-holiday session, which wrapped up early with a 1 p.m. ET close.
Oil plays took a beating as the price of crude plunged, sending oil and natural gas producers and drillers to some of the session’s worst losses among industry groups. The price of Bitcoin also plunged, with the related IPO stock Coinbase (COIN) slipping lower. Underlining the negative action, no relative strength lines for stocks on the IBD Growth 250 list hit new highs on Friday.
News of a rapidly spreading new coronavirus variant led the U.K. to immediately move to restrict travel from a half-dozen African countries. The European Commission recommended EU countries enact similar travel bans.
Oanda senior market analyst Craig Erlam said the uncertainty surrounding the new South African coronavirus variant was sparking fears of additional restrictions and lockdowns.
“We’ll no doubt learn more in the days and weeks ahead but for now, fear of the unknown will weigh heavily going into the weekend and could carry over into next week,” he said in a research note. “We’re seeing a typical flight to safety in the markets with equities, commodity currencies and oil getting whacked and traditional safe havens like bonds, gold, the yen and swissy (Swiss franc) getting plenty of love.”
Nasdaq Falls As Small Caps Get Squished
The tech-heavy Nasdaq suffered its worst-ever Black Friday on record. It closed down 2.2%. Chinese e-commerce stock Pinduoduo (PDD) was the worst laggard, closing down nearly 16% after reporting a third-quarter sales miss. Booking Holdings (BKNG) and Marriott International (MAR) also struggled.
U.S. Stock Market Today Overview
Last Update: 1:20 PM ET 11/26/2021
The S&P sectors all closed in the red, with energy and financials the biggest laggards. Consumer staples and health fared best.
Small caps took a bearish hit as the Russell 2000 closed down 4.2%.
Growth stocks actually weathered the storm relatively well, with the Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, falling 1.8%.
Dow Jones Dives As American Express Crumbles
The Dow Jones Industrial Average suffered its worst day of 2021 in the shortened session. Its 905-point loss equated to a dip of 2.5%.
Boeing (BA) was the next worst performer, dipping 5.4%. More Covid lockdowns could result in fewer aircraft sales. The stock lost further ground on its 50-day and 200-day moving averages.
Moderna Stock Shoots Higher As New Covid Threat Emerges
Coronavirus vaccine plays made good progress as fears grew over a new Covid variant discovered in South Africa. It has been named Omicron by the World Health Organization and has been given the status “variant of concern.”
Belgium confirmed a case of the new Covid-19 variant. It has also been identified in Botswana, Hong Kong and Israel.
“We don’t know very much about this yet. What we do know is that this variant has a large number of mutations. And the concern is that when you have so many mutations, it can have an impact on how the virus behaves,” said Dr. Maria Van Kerkhove, who leads the WHO’s technical work on Covid-19, during a question-and-answer session on social media.
Moderna stock exploded higher, closing up 20.6%. The stock gapped above its 50-day line in huge volume.
Pfizer rose just over 6% while partner BioNTech jumped 14.2%. Johnson & Johnson (JNJ) fell 0.7%.
Oil Stocks Burnt As Crude Falls
U.S. oil was slightly off lows, but remained down almost 12% to just over $69. It suffered its worst day since April 2020. International benchmark Brent crude futures fell just shy of 11% to $73.41 per barrel.
Energy performed worst out of all the S&P Sectors Friday, dropping by 4%. Among energy ETFS, the Vanguard Energy Index Fund (VDE) dropped more than 4%, while the VanEck Oil Services ETF (OIH) dropped 3.7%.
In addition, Ovintiv (OVV)) exited Leaderboard after it fell under its 50-day line after a trendline breakout. It closed the day with a loss of 11.6%.
Warren Buffett Stock Does This
Warren Buffett stock Snowflake (SNOW) was continuing to fight back following challenging action earlier in the week.
The large-cap enterprise software developer closed the day with a gain of 2.1%.
It is now technically offering a rebound entry off its 10-week moving average. The entry here is 346.69 and it is actionable as high as 381.36.
The company is getting set to post its latest earnings report on Dec. 2, which adds risk.
The data analytics play previously passed the 20% profit goal from a buy point of 328.16. It has fought back well after ceding much of its gains.
Snowflake is a member of the prestigious IBD Leaderboard list of top growth stocks.
Bitcoin Dives; Coinbase Stock Slides
Bitcoin was toiling once again, falling 8.5% to just over $54,000, according to CoinDesk.
Crypto exchange play Coinbase fell 3%, and is now well off recent highs of 368.90. The IPO stock fell closer to its 50-day moving average.
Oanda analyst Erlam said recent performance underlines the fact that Bitcoin remains a speculative risk asset, at least for now.
“In recent weeks we’ve seen that, in times of real uncertainty, Bitcoin has not done well as an inflation hedge or a safe haven asset,” he said in a note to clients. “There’s no doubt it’s a fascinating tradable instrument and a highly speculative one, but it’s quite clear now that it’s a risk asset and nothing more.”
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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