Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Stocks rally, dollar gains as Omicron fears ease

EconomyDec 06, 2021 05:11PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: An electronic stock quotation board is displayed inside a conference hall in Tokyo, Japan November 1, 2021. REUTERS/Issei Kato 2/2

By Herbert Lash

NEW YORK (Reuters) -The dollar edged higher while U.S. and European shares rallied on Monday after easing concerns about the Omicron coronavirus variant led investors to buy stocks that will likely perform well in a rising interest rate environment.

Yields on U.S. government debt surged, with the benchmark U.S. 10-year Treasury yield climbing back above 1.4% after sliding last week to its lowest level since late September.

Gold prices slid on the firmer dollar and rising Treasury yields, but losses were limited on expectations that U.S. consumer price data due later this week will show the pace of inflation quickening.

Stocks on Wall Street closed a sea of green as economically sensitive value stocks, led by banks and energy shares, rose 1.46% compared to a 0.94% gain in growth stocks.

Federal Reserve policymakers are likely to accelerate the tapering of their bond-buying program when they meet next week in response to a tightening labor market. They also are likely to hike rates earlier than projected to keep inflation down.

There have been roughly six periods since the 1990s marked by rising rates when value did better than growth, said Brian Pietrangelo, managing director of investment strategy at Key Private Bank in Cleveland.

"Looking at those six different eras, generally speaking value-oriented stocks performed better," Pietrangelo said.

On Wall Street stocks pared earlier strong gains. The Dow Jones Industrial Average rose 1.87%, the S&P 500 gained 1.17% and the Nasdaq Composite added 0.93%.

MSCI's all-country world index advanced 0.81% and the broad STOXX Europe 600 index rose 1.28%.

Energy and banking were big movers in Europe, closing up 1.86% and 1.83%, respectively. Industrials and consumer staples were the S&P's strongest sectors, rising 1.64% and 1.60%.

The rebound after a recent sell-off shows investors are not giving up on the prospect of a "Santa Claus rally" as Omicron fears recede, said Sam Stovall, chief investment strategist at CFRA Research.

"This Omicron variant, while still largely unknown, through anecdotal evidence points to something that will not be as ground-shaking as was originally thought," Stovall said.

Omicron has spread to about a third of U.S. states, but the Delta version remains the majority of COVID-19 infections in the United States, health officials said on Sunday.

Dr. Anthony Fauci, the top U.S. infectious disease official, told CNN it does not look like Omicron has a "great degree of severity."

Earlier in Asia, the MSCI index of Asia-Pacific shares outside Japan lost 1%.

China's central bank said it would cut the amount of cash banks must hold as reserves in an attempt to revive economic growth. The region has seen a series of corporate setbacks after ride-hailing giant Didi decided to withdraw from its New York listing last week.

Shares in China's Evergrande plunged about 20% after the developer said there was no guarantee it would have enough funds to meet debt repayments.

The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.095% to 96.292.

The euro was down 0.27% at $1.1283, while the yen traded up 0.62% at $113.5000.

The yield on 10-year U.S. Treasury notes jumped 9.5 basis points to 1.436% after losing almost 13 basis points last week.

The market still expects aggressive Fed tightening to fight rising inflation.

"By severely limiting the FOMC's ability to respond to downside risks posed by Omicron, inflation has effectively destroyed the Fed put," Jefferies (NYSE:JEF) analysts said in note.

Inflation is "now the dominant driver of not only rates, but all risk assets," they added as traders wait for Friday's U.S. consumer price report.

Bitcoin slid 0.63% to $49,124.70 after hitting a low of $41,967 over the weekend as profit-taking and macro-economic concerns prompted nearly $1 billion worth of selling across cryptocurrencies.

Oil climbed more than 4% on hopes Omicron will have a less damaging economic impact if its symptoms prove to be mostly mild and as the prospect of an imminent rise in Iranian oil exports receded.

Brent crude rose $3.20 to settle at $73.08 a barrel. U.S. crude settled up $3.23 at $69.49 a barrel.

U.S. gold futures settled down 0.3% at 1,779.50 an ounce.

Stocks rally, dollar gains as Omicron fears ease
 

Related Articles

U.S stock indexes bounce back on strong earnings
U.S stock indexes bounce back on strong earnings By Reuters - Jan 19, 2022 2

(Reuters) - Wall Street's main indexes opened higher on Wednesday after upbeat results from a host of companies partially offset a wobbly start to the fourth-quarter reporting...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (9)
Oldfashioned Owl
Oldfashioned Owl Dec 06, 2021 7:29PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Same reasons for opposite price action alternate days. lol
Whaling Trawler
Whaling Trawler Dec 06, 2021 4:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No one is fearing jack squat. Stop taking drugs and finally join reality...
Mart Bab
Rubberduck1973 Dec 06, 2021 4:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The selloff started with the FEDs comments and ends with omicron fear diminishing????. Very soon the fed will speak again. Keep buying bulls.
Empire Destroyer
Empire Destroyer Dec 06, 2021 4:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Man what? Sell off started with O and extended with Fed so now rallying cos of O and will extend cos of Fed... get it right!!!
Mox Mox
Mox Mox Dec 06, 2021 4:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
classic old tactic to control a hot market....they don't need to raise rates. they can release steam any time they want. the 'control' the market.
Abdinasir Yuzuf
Abdinasir Yuzuf Dec 06, 2021 9:44AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
It is true brother
Zuci Hermosa
Zuci Hermosa Dec 06, 2021 7:04AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hmm inflation too high but, market respond good, so funny
Zuci Hermosa
Zuci Hermosa Dec 06, 2021 7:04AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hmm inflation too high but, market respond good, so funny
Abdinasir Yuzuf
Abdinasir Yuzuf Dec 06, 2021 7:04AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Pwr Strk
Pwr Strk Dec 06, 2021 2:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
why is it I no longer trust Investing.com?
Modern Matrix
Modern Matrix Dec 06, 2021 2:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
cause they are garbage
Abdinasir Yuzuf
Abdinasir Yuzuf Dec 06, 2021 2:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Because it is clean
Artem Key
Artem Key Dec 06, 2021 12:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Omicron's mild symptoms?! That is a huge mistake, despite the fact the Delta cases just started their march in the US. Omicron's cases in Africa will show how bad it will hit that country. Just wait for one-two weeks and you will see how many deaths will be there. What a stupid world!
Abdinasir Yuzuf
Abdinasir Yuzuf Dec 06, 2021 12:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What is the cause?
You R Aterd OO
MartyMcFly1985 Dec 06, 2021 12:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Over-react much???
Tyrone Jackson
Tyrone Jackson Dec 05, 2021 9:05PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Evergrande will default today and this site won’t report on it. The crypto carnage was China trying to get some cash ready for the mess Evergrande will create.
Show previous replies (3)
Tyrone Jackson
Tyrone Jackson Dec 05, 2021 9:05PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Zero hedge
perplexed76 .
perplexed76 . Dec 05, 2021 9:05PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
crypto is for gray money
Aconomics adub
Aconomics adub Dec 05, 2021 9:05PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I guess if China problems in the housing is isolated there are markets in the us should not care one bit like its real anyways
perplexed76 .
perplexed76 . Dec 05, 2021 9:05PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Aconomics adub  china housing is 40% of china gdp
Abdinasir Yuzuf
Abdinasir Yuzuf Dec 05, 2021 9:05PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Aconomics adub It is true brother
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email