Financial Insight

The Standard & Poor’s 500 dropped 2.3% on Friday, its worst one-day loss since February. Only five trading days earlier, the S&P 500 had closed at a record high.

Friday’s abrupt reversal occurred after a handful of nations, including the United States, reinstated travel restrictions on visitors coming from southern Africa, a precaution taken to prevent the spread of a new variant of Covid-19.  Whether the new variant is prevented by existing vaccines is not yet known.

Friday’s loss followed a surge that began at the start of October in which the stock market soared for six weeks. The S&P 500 had closed at an all-time high on November 18. This Friday’s close was 2.2% lower than last Friday’s.

With markets closed for Thanksgiving yesterday, the Standard & Poor’s 500 stock index, closed two-hours earlier than normal on this Black Friday, at 4,594.62. Trading volume was much heavier than had been expected. The S&P 500 stock index, a barometer of U.S. strength, is up an astounding +69% from the March 23, 2020, Covid bear-market low.

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