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S&P 500 falls from record amid Omicron fears, upcoming Fed meeting

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The S&amp;P 500 dropped 0.91%, falling from an intraday record Monday, as investors weighed fears about the Omicron COVID-19 variant and looked ahead to the Federal Reserve's December meeting.&nbsp;File Photo by John Angelillo/UPI | <a href="/News_Photos/lp/f0f5c02306102052e5e551e5e4ab962a/" target="_blank">License Photo</a>
The S&P 500 dropped 0.91%, falling from an intraday record Monday, as investors weighed fears about the Omicron COVID-19 variant and looked ahead to the Federal Reserve's December meeting. File Photo by John Angelillo/UPI | License Photo

Dec. 13 (UPI) -- The S&P 500 fell from a record Monday as investors dealt with ongoing concerns about the Omicron COVID-19 variant and potential Federal Reserve policy announcements.

The broad index fell 0.91% from its intraday record while the tech-heavy Nasdaq Composite declined 1.39%. The blue-chip Dow Industrial Average closed the day down 320.04 points, or 0.89%.

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Investors responded to British Prime Minister Boris Johnson announcing Monday that at least one person infected with the Omicron variant had died.

The United States is also drawing closer to 800,000 coronavirus-related deaths since the start of the pandemic and the Omicron variant has been detected in 30 U.S. states.

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Shares of travel stocks were among the biggest losers as United Airlines stock dropped 5.24%, American Airlines fell 4.94% and Delta declined 3.24%. Shares of Carnival cruise line also dipped 4.88%.

Conversely, shares of vaccine maker Moderna rose 5.8% after Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, described COVID-19 booster shots as "optimal care," while asserting the definition of "fully vaccinated" would not change to include a booster.

Pfizer stock gained 4.59% after Israeli researchers concluded the company's boosters were effective against Omicron.

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Investors were also awaiting the Federal Reserve's December policy-setting meeting, which will take place over Tuesday and Wednesday, as Fed Chair Jerome Powell is due to deliver a monetary policy statement and press conference.

David Kostin, Goldman Sachs' chief U.S. equity strategist, wrote in a note that "both equity and fixed-income markets appear to be pricing the coming Fed tightening" as the firm expects the central bank to double the pace at which it will taper its bond purchasing program.

"Historical experience suggests equity valuations are typically flat around the first Fed hike," Kostin wrote. "Moreover, some of the longest duration and highest valuation stocks plunged during the past month, suggesting that equity market pricing of Fed tightening is also underway.

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