Dow drops 350 points after Moderna CEO warns it will take MONTHS to develop Omicron vaccine
U.S. stocks opened sharply lower on Tuesday after a warning from vaccine maker Moderna's chief executive on the effectiveness of COVID-19 shots against the Omicron variant hammered travel, energy and banking shares.
The Dow Jones Industrial Average dropped about 350 points, dragged down by additional losses in Coca Cola and American Express, according to CNBC.
The S&P 500 opened lower by 15.02 points, or 0.32%, at 4,640.25. The Nasdaq Composite dropped 66.34 points, or 0.42%, to 15,716.50 at the opening bell.
The Omicron variant also affected the global markets, with stocks dipping and oil prices rising after more countries reported cases of the new variant.
U.S. stocks opened sharply lower on Tuesday after a warning from Moderna CEO Stephane Bancel on the effectiveness of COVID-19 shots against the Omicron variant
As stocks in Asia Pacific and Europe slid, Dow futures were down 1% and oil prices dipped 2%, CNN Business reported.
Federal Reserve Chairman Jerome Powell is set to address the possible economic threats the Omicron variant poses to the U.S when he testifies in front of the Senate Banking Committee on Tuesday.
'Greater concerns about the virus could reduce people's willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,' he said in prepared remarks released early.
On Tuesday morning, Stephane Bancel, chief executive at the Massachusetts-based vaccine manufacturer, said he expects the highly-evolved Covid variant to cause a 'material drop' in the effectiveness of existing vaccines, warning that the result was 'not going to be good'.
He warned that it will take until summer 2022 for Moderna to develop a new vaccine and scale up manufacturing to vaccinate entire populations.
Scientists say it will take two weeks to truly work out how effective jabs are against Omicron, which has twice as many mutations on its spike protein as Delta.
The strain is expected to make current vaccines significantly weaker at preventing infections, but it's less clear how it will impact hospitalizations and deaths.
Stephane Bancel (pictured on CNBC earlier this year), chief executive at Massachusetts-based vaccine manufacturer, said he expects the highly-evolved Covid variant to cause a 'material drop' in the effectiveness of existing vaccines
Biden said at a White House press conference Monday: 'We do not yet believe that additional measures will be needed.
'But so that we are prepared if needed, my team is already working with officials at Pfizer, Moderna, and Johnson & Johnson to develop contingency plans for vaccines or boosters if needed.'
Moderna alongside other vaccine manufacturers is working on a tweaked version of their jab to fight the Omicron variant.
But scientists say it could take 100 days before it is available.
Mr Bancel told the Financial Times that his company could deliver between two to three billion doses in 2022, but added it would be dangerous to shift all production to an Omicron-specific shot while other variants of the virus remained in circulation.
He also told CNBC's Squawk Box that his company is researching the variant and trying to determine how much of a risk it poses to Americans.
He fears that the antibodies Moderna's COVID-19 vaccine provides to fight against the virus could be eight times lower against the new strain.
'There are two key things that we don't know yet and will find out in [coming] weeks],' Bancel said.
'One is vaccine efficacy. What is the impact of this new variant on the vaccine efficacy, and we should know that in around two weeks.
'We believe this [variant] is highly infectious… it seems to be much more infectious than Delta,' Bancel said.
He said it still take anywhere from two to six weeks for his company to really know how the vaccine interacts with the vaccines, though.
Bancel's warning came as G7 health ministers held emergency talks on the new variant, which is spreading around the world and prompting nations to close their borders once again or impose fresh travel restrictions.
Bancel said researchers were concerned because 32 of 50 mutations found in the Omicron variant were on the spike protein, a part of the virus that vaccines use to bolster the immune system against Covid.
His more alarming tone contrasts with efforts by politicians to project calm regarding Omicron.
Biden said he was directing regulators to push as fast as possible - without cutting corners - to approve rapidly any new vaccines.
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