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Dow, S&P close at record highs as Omicron worries ease

Stock MarketsDec 29, 2021 07:20PM ET
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© Reuters. A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., December 28, 2021. REUTERS/Andrew Kelly

By Echo Wang

(Reuters) - The Dow and S&P 500 closed at all-time highs on Wednesday on a boost from retailers including Walgreens and Nike , as investors shrugged off concerns on the spreading Omicron variant.

The Dow has now risen six straight trading days, marking the longest streak of gains since a seven-session run from March 5 to March 15 this year.

Walgreens Boots Alliance (NASDAQ:WBA) and Nike Inc (NYSE:NKE) rose 1.59% and 1.42% respectively against the backdrop of recent reports suggesting holiday sales were strong for U.S. retailers.

Data on Wednesday showed the U.S. trade deficit in goods mushroomed to the widest ever in November as imports of consumer goods shot to a record, as the coronavirus pandemic has limited spending by Americans on services.

Some early studies pointing to a reduced risk of hospitalization in Omicron cases have eased some investors concerns over the travel disruptions and powered the S&P 500 to record highs this week.

"The market started to recognize that the Omicron variant was in a strange way good news, because it will burn itself out more rapidly because it's easily transmissible, but it's less likely to overwhelm hospitals," said Jay Hatfield, founder and chief executive of Infrastructure Capital Management in New York. Still, he said Omicron arguably is going to be a headwind for at least the next month.

Meanwhile, the S&P 1500 airlines index dipped. Delta Air Lines (NYSE:DAL) and Alaska Air (NYSE:ALK) Group canceled hundreds of flights again on Tuesday as the daily tally of infections in the United States surged.

Three of the 11 major S&P sector indexes declined, the energy index, the consumer services sector .SPLRCL and the financial sector are in the red.

Typically, the final five trading days of the year and the first two of the subsequent year are seasonally strong for U.S. stocks, known as the "Santa Claus Rally." However, market participants warned against reading too much into daily moves as the holiday season tends to record some of the lowest volume turnovers that can cause exaggerated price action.

The Dow Jones Industrial Average rose 90.42 points, or 0.25%, to 36,488.63, the S&P 500 gained 6.71 points, or 0.14%, to 4,793.06 and the Nasdaq Composite dropped 15.51 points, or 0.1%, to 15,766.22.

The S&P 500 dipped on Tuesday in the lowest trading volume session of 2021, snapping a four-day winning streak.

As 2021 draws to a close, the main U.S. stock indexes are on pace for their third straight year of stunning annual returns, boosted by historic fiscal and monetary stimulus. The S&P 500 is looking at its strongest three-year performance since 1999.

The focus next year will shift to the U.S. Federal Reserve's path of interest rate hikes amid a surge in prices caused by supply chain bottlenecks and a strong economic rebound.

Among other stocks, shares of Victoria’s Secret & Co rose more than 12% after the intimate apparel retailer announced a $250 million accelerated share repurchase program. The retailer also said they had strong sales over the holidays.

Tesla (NASDAQ:TSLA)'s CEO Elon Musk exercised all of his options expiring next year, signaling an end to his stock sales. Its shares dropped 0.21% but were still on course to end about 54% for the year.

Volume on U.S. exchanges was 7.89 billion shares, compared with the 11.15 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.20-to-1 ratio; on Nasdaq, a 1.43-to-1 ratio favored decliners.

The S&P 500 posted 76 new 52-week highs and no new lows; the Nasdaq Composite recorded 77 new highs and 374 new lows.

Dow, S&P close at record highs as Omicron worries ease
 

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Comments (8)
William Smith
William Smith Dec 30, 2021 12:10AM ET
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When the US hits a million cases a day next week it will be interesting to see the markets reaction. Then maybe 2 million a day the week after. Although the test kits and ability to diagnose 2 million a day may not exist by then.
Ranjit kumar
Ranjit kumar Dec 29, 2021 9:19PM ET
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inflation??
Horde NotTrade
Horde NotTrade Dec 29, 2021 5:35PM ET
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lol Omicron
Richard Ash
Richard Ash Dec 29, 2021 5:35PM ET
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Have you been stupid your whole life or is it a recent thing
Dave Jones
Dave Jones Dec 29, 2021 4:35PM ET
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you know sooner or later people will wake up right?
Ron Love
Ron Love Dec 29, 2021 4:06PM ET
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What waning omicron worries? Media still pumping panic about the common cold variant.
Di Tol
Di Tol Dec 29, 2021 1:13PM ET
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Europe is closing down everywhere and US markets are living in their own dream. History repeats itself...January 2020..
Ron Love
Ron Love Dec 29, 2021 1:13PM ET
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That’s Europe’s problem, most of us in the US stopped playing pandemic months ago
Chad RicherThanYou
Chad RicherThanYou Dec 29, 2021 12:37PM ET
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Bond market collapse in 2022
Graven Hoandi Nanub
Graven Hoandi Nanub Dec 29, 2021 10:40AM ET
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it's December....Markets Don move that more.
 
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