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* Travel, banking, energy stocks lead declines
* Pfizer hits record high
* Dow eyes worst day since October 2020
NEW YORK, Nov 26 (Reuters) - U.S. stocks dropped on Friday,
with the Dow and S&P 500 suffering their biggest
one-day percentage drops in months, and pandemic-hit sectors
that have benefited from a reopening falling sharply after a new
and potentially vaccine-resistant coronavirus mutation was
Authorities around the world reacted with alarm on Friday to
the coronavirus variant found in South Africa, with the European
Union and Britain among those tightening border controls as
researchers sought to establish if the mutation was
Cruise operators Carnival Corp, Royal Caribbean
Cruises and Norwegian Cruise Line each plunged
more than 10%, while shares in United Airlines, Delta
Air Lines and American Airlines also tumbled.
The NYSE Arca Airline index saw its biggest one-day
percentage decline in over a year.
Retailers fell as Black Friday, the start of the holiday
shopping season, kicked off as the new variant fueled concerns
about low store traffic and inventory issues.
Selling was broad, with big declines in all 11 major S&P
sectors except healthcare, which fell slightly thanks
to strong gains in COVID-19 vaccine makers Pfizer Inc
and Moderna Inc.
"It is déjà vu all over again for like the eighth time,"
said Keith Buchanan, senior portfolio manager at Global
Investments in Atlanta.
"What we understand about this variant could accelerate over
the weekend, if there is more concerning news than good news, a
lot of people don't want to be holding risk assets on Monday
morning, or are afraid of what that could look like Monday
Despite the sell-off, market participants noted the drop was
likely exaggerated by the thin volume during the shortened
post-Thanksgiving holiday session.
Unofficially, the Dow Jones Industrial Average fell
905.04 points, or 2.53%, to 34,899.34, the S&P 500 lost
106.74 points, or 2.27%, to 4,594.72 and the Nasdaq Composite
dropped 353.57 points, or 2.23%, to 15,491.66.
The domestically focused Russell 2000 small-cap index
tumbled more than 3%.
The S&P 500 banks index plummeted as investors
dialed back expectations of faster U.S. interest rate hikes.
Elevated U.S. inflation, coupled with strong economic data
and the renomination of Jerome Powell as the Federal Reserve
chair by U.S. President Joe Biden, had fueled expectations the
central bank may have to hike interest rates earlier than it had
The CBOE volatility index, popularly known as Wall
Street's fear gauge, hit its highest level since Sept. 20.
Stocks such as Netflix Inc, Peloton Interactive
and Zoom Video Communications, known as
"Stay-at-home" names all saw solid advances.
(Reporting by Chuck Mikolajczak; Editing by Richard Chang)