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Nasdaq Slumps, Dow Tanks As  Omicron Spread Rattles Global Markets

U.S. stock fell sharply lower Monday as the Omicron surge added to Wall Street's growing list of end-of-year concerns heading into a holiday-shortened trading week.

U.S. stocks slumped lower Monday, with tech stocks leading to the downside with heavy declines, as investors withdrew from risk markets heading into a holiday-shortened week amid a surge in global Omicron infections and lingering concerns of the impact of rising inflation.

In Europe, where the variant appears to be accelerating fastest, new restrictions on travel are being imposed by France and Germany, while the Netherlands issued fresh lockdown orders Sunday that could be picked up by neighboring countries over the coming days.

In the U.S., outbreaks in New York have triggered new warnings on indoor gatherings, with the cancellation of several Broadway shows, while sports teams around the nation were hit by multiple infections, game delays and restrictions on out-of-country travel.

Dr. Anthony Fauci, the country's leading infectious disease expert, told NBC's 'Meet the Press' Sunday that Omicron is now "raging through the world", making the need for Americans to get a third vaccination dose more crucial than ever.

The WHO said Omicron infections are doubling every 1.5 to 3 days, while U.S. health officials have said its been identified in at least 43 of the nation's 50 states.

Alongside that, news that the World Economic Forum in Davos would be cancelled for third consecutive year also reminded markets of the seriousness of the recent Omicron outbreak.

U.S. markets may also feel the impact of Democratic Senator Joe Manchin's decision to withdraw support for President Joe Biden's 'Build Back Better' program, a move that likely puts the $1.75 trillion stimulus bill in serious, if not fatal jeopardy.

Goldman Sachs, in fact, trimmed its first quarter growth forecast to 2% from 3%, noting that the U.S. fiscal impulse fiscal "will become somewhat more negative than we had expected" as a result of the Manchin decision.

Curiously, even as concerns for faster inflation and higher interest rates continue to pound tech stocks, Treasury bond yields were marked notably lower in overnight trading as investors look to slower growth prospects linked to the both the Omicron surge and the potential impact of a hawkish Federal Reserve.

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Benchmark 10-year note yields traded at 1.381% during New York trading even as the dollar index, which tracks the greenback against a basket of six global currencies, held near multi-week highs of 96.401.

On Wall Street, the Dow Jones Industrial Average slumped 620 points by mid-day trading while the S&P 500 gave back 77 points from Friday's close.

The Nasdaq Composite fell 270 points in a move that extends last week's combined loss of around 3%, pegging the tech-focused benchmark some 8.4% from the all-time high it reached on November 22.

On the vaccine front, Moderna  (MRNA) - Get Moderna, Inc. Report gained 1.2% after the drugmaker said its booster shot induced a big jump in antibodies that can fight against the Omicron variant.

Oracle  (ORCL) - Get Oracle Corporation Report added to a record M&A year with a $28.3 billion for electronic medical records company Cerner  (CERN) - Get Cerner Corporation Report, while Rocket Companies  (RKT) - Get Rocket Companies Inc Class A Report fell 3% after it unveiled plans to pay $1.3 billion for the personal finance app Truebill.

Other stocks on the move include Biogen  (BIIB) - Get Biogen Inc. Report, which gained 1.2% after unveiling plans to cut the price of its Alzheimer's drug in half as it looks to expand the global market for the recently-approved treatment. 

In Europe, the region-wide Stoxx 600 slumped 1.3% by mid-fternoon trading in Frankfurt, lead to the downside by energy and tech stocks, as oil prices tumbled amid reduced demand bets.

WTI futures contracts for February delivery were marked $3.40 lower from Friday's close to change hands at $687.38 per barrel3.01 to $71.52 per barrel.

In Asia, stocks extended their recent slide even as The People's Bank of China cut it benchmark loan prime rate for the first time since the peak of the 2020 pandemic in an effort to induce corporate liquidity in the world's second-largest economy. 

The region-wide MSCI ex-Japan index was marked 1.8% lower heading into the final hours of trading while the Nikkei 225 in Tokyo closed 2.13% lower at 27,937.81 points.