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U.S. stocks close up as Omicron fears fall; 'Santa Claus rally' may be muted

Stock MarketsDec 22, 2021 06:11PM ET
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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 Jessica DiNapoli

NEW YORK (Reuters) -U.S. stock indexes closed broadly higher on Wednesday after investors cheered positive economic data and the White House said it was resuming talks on a massive social spending and climate change bill with a holdout senator.

The market gained throughout the trading session, overcoming fears about the Omicron COVID-19 variant, and was pushed upward by improving consumer confidence and gross domestic product growth. The positive swing continued Tuesday's trend, when stocks recouped losses.

"With COVID fears, there’s not as much worry as before," said Anu Gaggar, global investment strategist for Commonwealth Financial Network. "It may not have as much of an impact on the economy. (U.S. President Joe) Biden has said we won’t go back to lockdown."

The White House said on Wednesday that it would continue talks with Senator Joe Manchin, who delivered what appeared to be a fatal blow to Biden's Build Back Better bill over the weekend by saying he would not support it.

Gaggar added that volatility in December has been much higher than usually seen, and that her conviction is that the "Santa Claus rally is slightly lower this year.”

The so-called "Santa Claus rally" is the last five trading days of the year and the first two of the next year, when stocks often are higher. According to an article from LPL Financial (NASDAQ:LPLA), if Santa does not come, it could portend a bear market.

Riskier currencies such as the Australian dollar and the euro recovered against the U.S. dollar on Tuesday, while U.S. Treasury traders discounted the threat of long-term inflation as the yield curve flattened.

The Dow Jones Industrial Average rose or 0.74% to 35,753.89, while the S&P 500 gained 1.02% to 4,696.56. The Nasdaq Composite added 1.18%, to 15,521.89.

MSCI's gauge of stocks across the globe gained 0.94%.

Oil prices climbed as fears of tight supply and drawdowns in the United States offset concerns about COVID-19 dampening demand. U.S. crude recently rose 2.66% to $73.01 per barrel and Brent was at $75.56, up 2.14% on the day.

Little is known about the severity or transmissibility of the Omicron variant, but top U.S. infectious disease expert Anthony Fauci said on Wednesday that holiday gatherings of over 40 people are not safe even for people who are vaccinated and got a booster dose.

Meanwhile, Biden warned Americans about the risks of being unvaccinated - saying it "can be the difference between life and death" - and brought military personnel to support overwhelmed hospitals.

The United States also authorized Pfizer Inc (NYSE:PFE)'s antiviral COVID-19 pill for at-risk people aged 12 and above.

Currency market moves were generally muted as trading slowed before the Christmas holidays. The dollar index fell 0.375%.

Elsewhere, cryptocurrencies slipped slightly, with bitcoin roughly flat at $48,937.70, still well below the all-time high of $69,000 hit in November.

U.S. stocks close up as Omicron fears fall; 'Santa Claus rally' may be muted
 

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Comments (17)
look Around
look Around Dec 22, 2021 4:39PM ET
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lol well see dxy then search cot if u know whats tgat dxy 96.007 -95.540 is monthly support to 98.377 🤣 just watch dollar what will do and cot dollar added more longs and sp 500 stock asset managers cut longs just enjoy the show from now till jan 2022
Maks Mars
Maks Mars Dec 22, 2021 9:14AM ET
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Boogeyman Omicron will be catastrophic but everyone is hiding the truth to preserve stock markets…..retailers trapped saving with zero rates
Søren Kronberg
Søren Kronberg Dec 22, 2021 8:32AM ET
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The virus is much contageus, moves a lot quicker and is milder. Death toll from this straine is significant lower. C’mon write something positiv instead of trying to make everything so glomy!! Its christmas for god sake
Dave Jones
Dave Jones Dec 22, 2021 7:35AM ET
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great article brilliant analysis
marlow seay
marlow seay Dec 22, 2021 7:04AM ET
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Market maker news cover
Mohd Izhar Muslim
Mohd Izhar Muslim Dec 22, 2021 4:52AM ET
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thank you for the article 👍
lokesh bothra
lokesh bothra Dec 22, 2021 3:32AM ET
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omicron the tag line they have given ,for just mild cold and making it has threat it's big SCAM!
Ac Tektrader
Ac Tektrader Dec 22, 2021 2:44AM ET
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I hear the Russians are dying like flies. their vaccine doesn't have much of an effect on the new varients. and of course putin is trying to cover it up.
Павел Чубенко
Павел Чубенко Dec 22, 2021 2:44AM ET
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Oooo, yep. We are drunkards, addicts and also cannibals. I am Russian, it's make me laugh. Maybe you right and many people have issues with Covid, but unfortunately it's our character, we are carelessness and just didn't any one shoot vaccine. Many people who hospitalised hadn't vaccine whether only one dose.
Carlos Sacasa
Carlos Sacasa Dec 22, 2021 2:38AM ET
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Reuter is ramping up the fearmongering. This like the 3 or 4 acticle on the common col.... i mean, the omi variant.
Ac Tektrader
Ac Tektrader Dec 22, 2021 2:38AM ET
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I hear the Russians are dying like flies. their vaccine doesn't have much of an effect on the new varients. and of course putin is trying to cover it up.
Anyelo Jesus Tengo
Anyelo Jesus Tengo Dec 22, 2021 1:11AM ET
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Hola
 
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