NEW YORK (REUTERS) – Wall Street ended lower on Monday (Dec 13), 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 per cent of Covid-19 infections in London and at least one death in the Britain.

Norwegian Cruise Line Holdings, Carnival Corp and Royal Caribbean Cruises all slumped more than 4 per cent, while the S&P 1500 airlines index shed about 3 per cent.

“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 Globalt Investments senior portfolio manager Tom Martin.

“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, utilities and real estate gaining.

The Dow Jones Industrial Average fell 0.89 per cent to end at 35,651.61 points, while the S&P 500 lost 0.91 per cent to 4,669.15.

The Nasdaq Composite dropped 1.39 per cent to 15,413.28.

Following Monday’s dip, the S&P 500 remains up about 24 per cent year to date.

Apple dipped 2.1 per cent, even after JP 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 US$3 trillion (S$4.10 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 United States 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 Jacob Internet Fund chief portfolio manager Ryan Jacob.

A Reuters poll of economists sees the central bank hiking interest rates from near zero to 0.25 per cent to 0.50 per cent in the third quarter of next year, followed by another in the fourth quarter.

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 index to a record closing high on Friday.

Pfizer rose 4.6 per cent after it agreed to acquire Arena Pharmaceuticals in a US$6.7 billion all-cash deal.

Arena’s shares surged 80 per cent.

Volume on US exchanges was 10.4 billion shares, compared with the 11.4 billion average over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 2.3-to-1 ratio; on Nasdaq, a 2.53-to-1 ratio favoured decliners.

The S&P 500 posted 52 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 33 new highs and 302 new lows.