U.S. stock benchmarks traded solidly higher Monday afternoon, with the S&P 500 and Nasdaq Composite indexes climbing to session highs, as President Joe Biden told Americans the fight against the omicron variant of coronavirus won’t involve “shutdowns or lockdowns.”
How are major stock indexes trading?
The Dow Jones Industrial Average
rose 297 points, or 0.8%, to about 35,200, not far from Monday’s peak at 35,287.91.
The S&P 500 index
gained 71 points, or 1.6%, to around 4,665.
The Nasdaq Composite Index
advanced 313 points, or 2%, to about 15,802, near a session high.
In a holiday-shortened session on Friday, the Dow slumped 905.04 points, or 2.5%, to 34,899.34, with the index logging its worst daily drop since Oct. 28, 2020, according to FactSet data. The S&P 500 fell 106.84 points, or 2.3%, to 4,594.62, and the Nasdaq Composite sank 353.57 points, or 2.2%, to 15,491.66.
What’s driving the markets?
Stocks were staging a partial comeback following the worst day in more than a year for the Dow and S&P 500 on Black Friday, amid lingering concerns over the new omicron variant of the coronavirus.
In a televised address about the variant, Biden said omicron is a cause for concern but not panic, and the fight against the variant won’t involve “shutdowns or lockdowns.” He also said that “we’ll fight this variant with scientific and knowledgeable actions and speed, not chaos and confusion,” and that vaccines likely offer protection against the COVID strain.
“On Thursday, I’ll be putting forward a detailed strategy outlining how we’re going to fight COVID this winter — not with shutdowns or lockdowns, but with more widespread vaccinations, boosters, testing and more,” the president said during his brief speech at the White House.
Omicron has been detected in at least a dozen countries and a number of countries have imposed flight bans from countries in southern Africa, where the variant was first discovered. On Friday, the World Health Organization’s technical advisory group declared it a “variant of concern.”
“With Covid dominating headlines, the market is grappling with how rising case counts could impact Fed policy and economic growth,” said Nicholas Gaskell, a portfolio manager at Eaton Vance WaterOak Advisors. For now, “investors are buying the dip” following last week’s selloff, Gaskell wrote in an email to MarketWatch.
Little is known about omicron, but some investors were focusing on preliminary indications of “mild” symptoms among those who had tested positive.
Dr. Angelique Coetzee, the South African doctor who was first to spot the new variant, told the BBC over the weekend that patients she had seen had “extremely mild symptoms.” But she added that it wasn’t clear yet how the disease would affect more vulnerable people, a view that was echoed elsewhere.
A flash poll of financial-market participants taken on Monday showed that only 10% of 1,569 respondents thought the omicron variant will be the biggest topic at year-end, according to Deutsche Bank research. Sixty percent said it would still be an issue of only moderate importance, and 30% said it would be largely forgotten about.
Meanwhile, investors will be watching out for the November nonfarm payroll on Friday for a snapshot into the health of the U.S. economy.
“I believe we are seeing a market that is trying to find its way,” Mark Stoeckle, chief executive of Adams Funds ADX, said in an email to MarketWatch. “Investors should understand that what happened on Friday was largely driven by algorithm trading. Fundamental trading was hard to find outside of some managers who are likely trailing the S&P 500 by a large amount and wanted to limit the pain.”
“With the benefit of a bit more information and a few days, today we are seeing what I would describe as more rational trading. Investors are searching among those stocks that were indiscriminately sold on Friday,” Stoeckle wrote.
Retailers will remain in focus for Cyber Monday, another big post-Thanksgiving shopping day. Adobe Analytics said online shoppers spent $8.9 billion this year, at the low end of its expectations and slightly short of the $9 billion that was spent in 2020.
Investors are awaiting this week’s OPEC gatherings, with a couple of technical meetings reportedly delayed so that members can assess the variant and price action. WTI slumped 13.1%, to close at $68.15 a barrel on the New York Mercantile Exchange on Friday, the biggest one-day drop for a front-month contract since April 20, 2020, according to Dow Jones Market Data. Brent tumbled 11% and both contracts saw their lowest close since Sept. 9.
Meanwhile, pending home sales rose 7.5% in October, compared with September, the National Association of Realtors reported Monday. Economists polled by MarketWatch had projected a 0.7% increase for pending home sales in October.
Compared with last year, pending sales were down 1.4%, reflecting how much home-buying activity has cooled from the breakneck pace of last year.
Which companies are in focus?
Shares of Twitter Inc.
slipped 1.8% after Jack Dorsey announced that he was stepping down as chief executive. He will be succeeded by Twitter chief technology officer Parag Agrawal. Dorsey also is the CEO of Square
and has been deeply involved in crypto such as bitcoin
and other passion projects. Shares of payments company Square were up 0.7%.
- Walmart Inc. WMT announced Monday that it will begin the search for a successor to Chief Financial Officer Brett Biggs, who has been with the company for 22 years and became CFO on Dec. 31, 2015. Walmart shares fell 1.3%.
Shares of Bumble Inc.
rose 3.3% after the dating-app operator was upgraded at Raymond James, which cited an “attractive entry point” following the post-earnings plunge.
- Chegg Inc.’s stock CHGG jumped 3.8% after the online education company announced a $300 million accelerated share repurchase (ASR) plan.
- Shares of Hertz Global Holdings Inc. HTZ rose 7.6% after the car rental company announced a new stock repurchase program of up to $2 billion.
How are other markets faring?
- The yield on the 10-year Treasury note TMUBMUSD10Y rose by 5 basis points to around 1.529%, versus 1.484% on Friday at 2 p.m. ET. The bond market was closed on Thursday in observance of Thanksgiving and ended an hour early on Black Friday.
- The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was up 0.3% at around 96.36.
Gold futures for February delivery
fell $2.90, or 0.2%, to settle at $1,785.20 an ounce.
- The Stoxx Europe 600 SXXP closed 0.7% higher, and London’s FTSE 100 index UKX finished 0.9% higher, recovering some of Friday’s decline of more than 3.5%.
- In Asia, the Shanghai Composite SHCOMP finished less than 0.1% lower, while the Hang Seng Index HSI lost 1% in Hong Kong. China’s CSI 300 000300 declined 0.2% and Japan’s Nikkei 225 NIK finished 1.6% lower.
—Barbara Kollmeyer and Mike Murphy contributed to this article