Dow drops 433 points as COVID-19 cases climb and Manchin sinks social spending bill
- US stocks fell on Monday amid rising COVID-19 cases and the spread of the Omicron variant.
- Also weighing on stocks was Senator Joe Manchin's rejection of President Biden's spending bill.
- Goldman Sachs estimates the rejection of Biden's spending bill will weaken the economy in 2022.
US stocks tumbled more than 1% on Monday amid rising COVID-19 cases and Senator Joe Manchin's rejection of President Biden's spending bill.
COVID-19 daily cases continue to rise, boosted by the spread of the more contagious Omicron variant. The seven-day average of US cases is hovering around 130,000. But that number could expand considerably over the next two weeks as the holiday travel season picks up.
"Cases might soar to 250,000 to 300,000, maybe 500,000 within a few weeks," Fundstrat's Tom Lee said in a Monday note to clients.
But while Omicron's surge seems inevitable in the US, Dr. Anthony Fauci doesn't expect the US to institute a new set of lockdowns to combat the virus, rather counting on vaccines, new antiviral therapies, and social distancing and mask wearing.
Meanwhile, Manchin's rejection of President Biden's $1.75 trillion Build Back Better plan means there is now little chance of passage for the social spending bill. That has the potential to hurt the economy, according to Goldman Sachs, which lowered its 2022 GDP estimates on Manchin's position.
Here's where US indexes stood at the 4:00 p.m. ET close on Monday:
- S&P 500: 4,568.18, down 1.14%
- Dow Jones Industrial Average: 34,932.16, down 1.23% (433.28 points)
- Nasdaq Composite: 14,980.94, down 1.24%
Monday's sell-off didn't help Ark Invest's innovation stocks, with many falling more than the broader market. Many of the beaten down stocks owned by Ark Invest are down more than 70% from their recent highs. But Wood is sticking by her investment strategy and expects monster returns over the next five years.
Lumber prices have surged 95% over the past 5 weeks due to ongoing supply chain issues related to Canadian floods, combined with demand staying strong for the building material.
Instagram is working to bring NFTs to a wider audience as its parent Meta goes all-in on the metaverse. A potential integration could enable people to bid for NFTs directly on Instagram. But one skeptic of the current metaverse landscape is Tesla CEO Elon Musk, who believes its simply a marketing buzzword right now.
Gold fell as much as 0.75% to $1,791.40 per ounce.
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