US Stocks Fall Again As Omicron Case Derails Rally

Wall Street stocks finished with steep losses for a second straight session on Wednesday, tumbling after US authorities announced the first confirmed case of the Covid-19 Omicron variant in the country.

Equities opened higher and were in positive territory most of the day following positive economic data.

But the trend shifted in the afternoon after the US Centres for Disease Control and Prevention reported that it detected the new coronavirus strain in a person in California.

The Dow Jones Industrial Average dropped 1.3 percent to end at 34,022.

The broad-based S&P 500 shed 1.2 percent to close at 4,513, while the tech-rich Nasdaq Composite Index fell 1.8 percent to 15,254.

"We've seen this movie before and Wall Street will likely remain Covid variant headline driven until a clear assessment over this wave can be made," Edward Moya, senior market analyst at Oanda, said in a note.

Tom Cahill, portfolio strategist at Ventura Wealth Management, said the market was still digesting remarks from Federal Reserve Chair Jerome Powell on Tuesday signaling a faster pullback of the Fed's stimulus policies.

The latest Covid-19 variant and the Fed's shift in tone together are "causing a lot of uncertainty among investors right now," Cahill said.

In economic data, payroll firm ADP estimated that private companies added a better-than-expected 534,000 jobs in November, a preview of the government jobs report on Friday.

Meanwhile, the Institute for Supply Management reported that manufacturing activity expanded at a faster pace last month amid signs the ongoing challenges in supply chains and hiring may be easing slightly. (AFP)