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S&P 500 Makes Strong Start to Week as Omicron Fears Ease

Stock MarketsDec 06, 2021 04:25PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 closed higher Monday, as easing fears about the impact of the Omicron variant of Covid-19 renewed investor bets on cyclical stocks, while a intraday rebound in tech also pushed the broader market higher.

The S&P 500 rose 1.2%, the Dow Jones Industrial Average gained 1.9%, or 646 points, the Nasdaq climbed 0.9%.  

The latest updates on the Omicron variant suggest the new coronavirus strain is less deadly than feared, easing investor fears about a potential economic fallout.

"[A]lthough it’s too early to make any definitive statements about it, thus far it does not look like there’s a great degree of severity to it," said Dr. Anthony Fauci, President Joe Biden's chief medical adviser, on CNN on Sunday.   

Renewed optimism on the recovery pushed cyclical stocks including financials and energy higher.

Financials, mostly banks, were also boosted by a rebound in Treasury yields following a rout last week, with the United States 10-Year yield rising above 1.4%.

First Republic Bank (NYSE:FRC), State Street (NYSE:STT), and Wells Fargo (NYSE:WFC) were sharply up more than 3% as rising Treasury yields boosts the net interest margin of banks – the difference between the interest income generated by banks and the amount of interest paid out to depositors.

As well as rising Treasury yields, Wells Fargo was boosted by an upgrade from Morgan Stanley.

Morgan Stanley upgraded Wells Fargo to overweight from equal weight amid expectations for a faster pace of Federal Reserve rate hikes.

Energy, meanwhile, was pushed higher by rising oil prices after Saudi Arabia hiked its selling prices for oil exports to U.S. and Asian customers.

"Today’s upswing was sparked by Saudi Arabia’s raising of its official selling prices at the weekend," Commerzbank said in a note. "The world’s largest exporter will be charging a higher price premium for oil deliveries to Asia in January than in the previous month."

Reopening sectors of the market including airlines, cruise lines, and hospitality stocks were in the ascendency. 

American Airlines (NASDAQ:AAL), Carnival (NYSE:CCL), and Wynn Resorts (NASDAQ:WYNN) shares were sharply higher. 

Tech jumped, adding to the broader market melt-up as investors bought the dip in big tech.

Semiconductor stocks, however, weighed on tech as Nvidia (NASDAQ:NVDA) slipped about 3% adding to recent losses.

Micron Technology Inc (NASDAQ:MU) was up more than 1% after Cowen hiked its price target on the stock to $99 from $80, as growing memory demand and tight supplies are expected to bolster the chipmaker's performance.

In electrical vehicle stocks Tesla (NASDAQ:TSLA) and Lucid (NASDAQ:LCID) were among the biggest decliners following regulatory troubles.

Lucid Group fell 5% after receiving a subpoena from the Securities and Exchange Commission related to its special purpose acquisition company merger deal with Churchill Capital Corp.

Tesla cut losses to end flat even despite U.S. Securities and Exchange Commission launching a probe into a whistleblower claims alleging the company had failed to notify its shareholders of solar panel defects, Reuters reported, citing a letter from the agency.

S&P 500 Makes Strong Start to Week as Omicron Fears Ease
 

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Comments (5)
Harlan Sk
Harlan Dec 06, 2021 6:28PM ET
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Bullish!
Mario tragik
Mario tragik Dec 06, 2021 6:09PM ET
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omicron fease ease ... lmao what a joke. Good thing I traded accordingly I new this would go up because "virus fears ease" 🤣 ok. what a manipulated joke.
John Avenetti
John Avenetti Dec 06, 2021 5:46PM ET
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ahahahhaha LOLILOL
New Jazenevd
New Jazenevd Dec 06, 2021 5:45PM ET
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Every dip is a buy in this market. Today was another confirmation.
Stan Smith
Stan Smith Dec 06, 2021 4:42PM ET
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It must be so difficult for an honest person to write articles like this. Where did inflation go?  you know the big pink elephant that sits outside banks and financial institutions everyday?
Empire Destroyer
Empire Destroyer Dec 06, 2021 4:42PM ET
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Man no one cares about inflation, if it was a problem then people would stop spoiling themselves with new things and constantly buying things through debt
Stan Smith
Stan Smith Dec 06, 2021 4:42PM ET
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Empire Destroyer  You mean like mortgage backed securities...?
Luis Bustamante
Luis Bustamante Dec 06, 2021 4:42PM ET
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Just wait till Friday
Miriam Morkhul
Miriam Morkhul Dec 06, 2021 4:42PM ET
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Look at mortgage delinquincy and eviction statistics, used cars price, foodstamp programs etc. Average population is getting squeezed.
 
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