Stock Market Today: Dow and Oil Drop as Covid Fears Grip Europe While

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Technology stocks popped on Friday, while the

Dow Jones Industrial Average
fell and bond yields dipped alongside a new surge in Covid-19 cases. 

Shortly after the open, the Dow slid 203 points, or 0.6%, after the index slipped 60 points Thursday to close at 35,870. The

S&P 500
was flat after the index closed at an all-time high Thursday. The technology-heavy

Nasdaq Composite
rose 0.6%.

The 10-year Treasury yield fell to 1.53% from a Thursday close of 1.61%. That’s a steep drop for one day, bringing it farther below its second half 2021 peak of 1.7%, hit in late October. 

That bodes well for the tech trade. Lower bond yields make futures profits more valuable—and fast-growing companies in the sector are expecting a large share of their profits to come many years down the line. 

Consistent with that, the S&P 500 is outperforming the Dow because of its concentration in technology. Outside of tech, stocks were having a rough day; about 60% of S&P 500 stocks were in the red.

Ultimately, market participants are rushing into safety Friday. The drop in the yield means investors are buying up the bond, sending the price higher. This comes as new Covid-19 cases perk up in Europe, prompting Austria to announce lockdowns beginning next week. 

Also not helping investors’ appetite for risk was economic data out of Germany. The countries’ producer-price index gained 3.8% month-over-month, higher than the expected 1.9% and above the previous result of 2.3%. Such strong inflation could compel the European Central Bank to hike interest rates, which could choke off economic growth, ultimately lowering inflation. ECB President Christine Lagarde said Monday morning that the central bank is currently unlikely to raise rates in 2022. Still, economic data will help guide monetary policy.  

The price of oil also dropped. WTI crude oil fell 3.2% to $76.50 a barrel. It’s down 9% from its 2021 high of more than $84 a barrel hit on Nov. 9. 

Oil stocks slid, too. The 

Energy Select Sector SPDR
Fund (XLE) fell more than 3%. It’s down just over 6% since the end of October when it hit a 2021 high. 

Overseas, Hong Kong’s

Hang Seng
Index fell 1.1%, underperforming other bourses in Asia as it was weighed down by a stark fall in

Alibaba

(ticker:…