Stock market drops due to fears of Omicron surge, setback to Biden’s spending plan

The stock market took a hit on Monday as investors began the trading week with fears of the surging Omicron COVID-19 variant and the setback to President Biden’s Build Back Better social spending bill. The blue-chip Dow Jones Industrial Average closed down by about 433 points at the end of trading Monday afternoon, while the broader S&P 500 dropped 1.14%. The Nasdaq Composite sagged 1.24%.

Travel, entertainment and retail stocks had some of the greatest losses earlier in the day but bounced back some by closing. The energy sector also took a significant hit as U.S. crude oil prices tumbled 3% to below $69 per barrel as investors worried that new restrictions might cut into energy demand. The sell-off came after the World Health Organization said Omicron cases are doubling every 1.5 to 3 days in countries where transmissions are documented. European leaders reacted by imposing new restrictions on Friday and over the weekend.

Analysts blamed some of Monday’s market downturn on Sen. Joe Manchin’s surprise announcement Sunday that he would not support President Joe Biden’s $2 trillion Build Back Better social spending agenda. The measure, with its billion of dollars in economic stimulus spending, is unlikely to pass the Senate.

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