U.S. stocks continued to rebound on Tuesday, as stock and oil prices rose in hopes that Omicron would prove to be less damaging to the economy than expected.
The benchmark S&P 500 index gained 95.08 points, or 2.1%, to 4,686.75, building on Monday’s gains and recouping all of its losses from last week. The technology-focused Nasdaq Composite Index jumped 461.76 points, or 3%, to 15,686.92, while the blue chip Dow Jones Industrial Average rose 492.40 points, or 1.4%, at 35719.43.
The track record of recent Omicron updates seems to indicate that another major economic shock is not yet to come, which has sparked a short hedging and a buying race after a few weeks of losses, the company said. ThinkMarkets analyst Fawad Razaqzada. “It’s a rally of relief,” he said.
Ultimately, however, investors will likely focus on monetary policy and the pace of the Federal Reserve’s debt reduction program, Razaqzada said. “This will be the next big thing for the market,” he said.
This week’s rebound puts stocks more in line with their usual seasonal performance. December tends to be a very strong month for stocks. The S&P 500 and the Dow Jones have historically risen in December more often than in any other month.
Uncertainty over Covid and Fed policy, however, can call into question the usual zest for life. Additionally, falling trading volumes as the holidays approach is likely to cause exaggerated moves in either direction, analysts say.
“We are in this time when investors are looking for all the news they can find and that, coupled with low liquidity, leads to big moves,” said Hugh Gimber, strategist at JP Morgan Asset Management.
US stocks were dominated by riskier and more growth-oriented sectors such as technology, energy and consumer discretionary. All 11 sectors of the S&P 500 rose. Certain consumer discretionary stocks particularly sensitive to changes in the Covid-19, such as Marriott International,
Hilton Worldwide et Royal Caribbean,
fell in afternoon trading, closing lower.
Bank stocks, which hovered with the latest Omicron news, rose. Morgan Stanley jumped 3.3% to $ 102.50, Wells Fargo gained 3% to $ 50.25 and JPMorgan was up 1.5% to $ 162.57.
FOR 11,96 %
shares rose 12% to $ 42.98 after immunology company and partner GlaxoSmithKline,
reported that their treatment with Covid-19 antibodies has been shown to be effective against the Omicron variant in laboratory studies.
Intel shares gained 3.1% to $ 52.57 after the Wall Street Journal announced that it planned to publicly list shares in its self-driving car unit Mobileye, CEO Pat Gelsinger’s latest move to revive the fortunes of the semiconductor giant.
U.S. crude futures rose 3.7% to $ 72.05 a barrel, as fears of further lockdowns related to Covid-19 fade. US crude is up 8.7% in the past two sessions. Brent crude, the world’s benchmark for oil, rose 3.2% to $ 75.44 a barrel. The move marked his fourth straight win and the biggest four-day percentage gain since January.
China’s efforts to inject liquidity into the financial system have also helped reassure investors that the downturn in the world’s second-largest economy will be managed, Gimber said. On Monday, the People’s Bank of China announced that it will reduce the reserve requirement ratio of banks by 0.5 percentage point to 8.4%, effective December 15. This would free about 1.2 trillion yuan, equivalent to about 188 billion dollars, into the financial system.
Shares of Hong Kong-listed Chinese real estate developers were significantly higher on plans, which could help China’s debt-burdened real estate sector. Sunac China Holdings jumped more than 15%, while China Aoyuan Group gained more than 10%.
Hong Kong’s larger Hang Seng Index gained 2.7% to 23,983.66, while China’s Shanghai Composite edged up 0.2% to 3,595.09. Japan’s Nikkei 225 was up 1.9% to 28,455.60 and South Korea’s Kospi added 0.6% to 2,991.72. In Europe, the pan-continental Stoxx Europe 600 index jumped 2.5% to 480.18.
Bitcoin, the world’s largest cryptocurrency by market value, rose 1.5% to $ 50,747, according to CoinDesk, as it continued to recover from the weekend liquidation.
In bond markets, the benchmark 10-year Treasury bond yield rose to 1.479% on Tuesday from 1.433% on Monday. Yields increase when prices fall.
Write to Caitlin Ostroff at [email protected] and Paul Vigna at [email protected]
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