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US stocks sink on new COVID-19 variant; Dow Jones loses 1,000 points

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
Traders look on as a screen shows US Federal Reserve Chairman Jerome Powell's news conference after the Federal Reserve interest rates announcement on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 31, 2019. (Reuters photo)

Stocks in the United States have fallen sharply amid fears of a new highly transmissible coronavirus variant from South Africa which is spreading fast across the world.

The Dow Jones Industrial Average dropped more than 1,000 points on Friday. The S&P 500 index was down 2.3 percent, on pace for its worst day since late September. The Nasdaq Composite was down 2.2 percent, according to reports.   

Stocks plunged as several countries moved to implement travel restrictions on southern Africa following the emergence of the new COVID-19 variant.

Health officials in Europe proposed suspending air travel from southern Africa, as cases of the variant were also found in Hong Kong, Belgium and Israel.

Health officials in Britain warned that the variant is one of the most significant yet.

The drops in US stocks echoed falls across Europe and Asia triggered by a surge in cases in a mutated form of the virus across parts of Africa.

“Things have escalated on the COVID front quite rapidly over the last 12 hours,” said Jim Reid, a strategist at Deutsche Bank. The new variant “was slowly starting to gather increasing attention but overnight it has begun to dominate markets,” he said.

Europe’s Stoxx 600 plunged 3.6 percent and was down 2.8 percent. France’s CAC 40 index and Germany’s Dax were down by 3.9 percent and 3.1 percent respectively.

London’s FTSE 100 index fell 3 percent. British Airways parent IAG, German carrier Lufthansa and aircraft maker Airbus fell about 10 percent.

In a news conference on Thursday, South African health officials said that the new variant is "very different" from past mutations.

Tech companies such as Apple and Facebook parent Meta plunged 2 percent and 1.4 percent on Friday while stocks of electric vehicle companies such as Tesla, Rivian and Lucid Motors all dropped.

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