After a few sessions of the market feeling more confident about the Omicron variant, fear took over again today with the virus spreading suddenly like wildfire in London and recording the first death, with much more expected to come. So just as there was a big rally on the leisure stocks last week, today there was a great exodus from them and a rush back into the defensive sectors of consumer staples, utilities and real estate.  In its monthly meeting that starts Tuesday, the Fed is expected to adopt a more hawkish tone regarding a wind-down and economists see a ¼ to ½% rate hike in Q3 2022.  Volume was more elevated at 10.8 billion shares traded. 

Mon  December 13, 2021  6:25 PM

Wall Street ends down; investors eye Omicron and Fed meeting

By Shreyashi Sanyal and Noel Randewich

DJ: 35,970.99  +216.30       NAS: 15,630.60  +113.23        S&P: 4,712.02  +44.57     12/10

DJ: 35,650.95  -320.04        NAS: 15,413.28  -217.32         S&P: 4,668.97  -43.05      12/13

Dec 13 (Reuters) - Wall Street ended lower on Monday, with shares of Carnival Corp and several airlines tumbling as investors worried about the Omicron coronavirus variant ahead of a Federal Reserve meeting later this week.  Travel-related stocks fell, with the fast-spreading variant accounting for around 40% of COVID-19 infections in London and at least one death in the United Kingdom. read more

Norwegian Cruise Line Holdings (NCLH.N), Carnival Corp (CCL.N) and Royal Caribbean Cruises  (RCL.N) all slumped, while the S&P 1500 airlines index (.SPCOMAIR) shed more than 2%.  "It's transportation, restaurants, all the things that if it got bad enough that we started putting new restrictions on people, it would not be good for them," said Tom Martin, senior portfolio manager at Globalt Investments in Atlanta. "They have all been bid over the past several months by the idea that we were going to get back to business as usual."  Most of the 11 major S&P 500 sector indexes fell, with only defensive sectors, including consumer staples (.SPLRCS), utilities (.SPLRCU) and real estate (.SPLRCR) gaining. 

The Dow Jones Industrial Average (.DJI) fell 320.04 points, or 0.89%, to 35,650.95, the S&P 500 (.SPX) lost 43.05 points, or 0.91%, to 4,668.97 and the Nasdaq Composite (.IXIC) dropped 217.32 points, or 1.39%, to 15,413.28.

Apple Inc (AAPL.O) dipped, even after J.P. Morgan raised its price target on the iPhone maker to the highest on Wall Street. The company is close to becoming the first in the world to hit $3 trillion in market value.  Investors expect an increasingly hawkish tone out of the Federal Reserve's two-day meeting that wraps up on Wednesday. The U.S. central bank is expected to signal a faster wind-down of asset purchases, which could also usher closer a start to interest rate hikes.  "Everyone is focused on the Fed this week and what guidance we get in terms of bond purchases and interest rates. There's an expectation that there will be an acceleration of tapering, and there's a little anxiety leading up to that," said Ryan Jacob, chief portfolio manager at Jacob Internet Fund.  A Reuters poll of economists sees the central bank hiking interest rates from near zero to 0.25%-0.50% in the third quarter of next year, followed by another in the fourth quarter. read more

Positive updates about vaccines and antibody cocktails to combat the new COVID-19 variant, along with a recent reading on inflation that was in line with consensus, pushed the S&P 500 (.SPX) index to a record closing high on Friday.  Pfizer Inc (PFE.N) rose after it agreed to acquire Arena Pharmaceuticals  (ARNA.O) in a $6.7 billion all-cash deal. Arena's shares surged about 80%. 

Note: No  volume data reported today but per the CBOE, 10.8 billion shares changed hands.