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Wall Street Opens at Fresh Highs on Omicron Hopes; Dow up 225 Pts

Stock MarketsJan 04, 2022 09:46AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened at fresh record highs again on Tuesday, extending a rally that has spanned the end of the old year and the start of 2022 as investors look beyond a short-term spike in Covid-19 cases.

By 9:40 AM ET (1440 GMT), the Dow Jones Industrial Average was up 225 points, or 0.6%, at 36,810 points. The S&P 500 was up 0.4%, while the Nasdaq Composite took a breather, edging down by less than 0.1%.

The divergence between value and growth continued even after the release of the day's economic data, which showed job vacancies falling slightly in November and a sharper-than-expected slowdown in manufacturing activity in December. The Institute of Supply Management's Purchasing Managers Index fell to 58.7, its lowest in a year. The survey showed the PMI's 'prices' subindex falling sharply for a second straight month, suggesting that inflationary pressures may be unwinding.

Both Tesla (NASDAQ:TSLA) and Apple (NASDAQ:AAPL) ran out of steam after Monday's rallies, Tesla stock inching up 0.5% and Apple stock effectively flat.  AT&T (NYSE:T) stock and Verizon (NYSE:VZ) stock both rose around 1% after agreeing to a two-week delay in the launch of their 5G services to appease airline industry and aviation regulators' concerns about safety.

Cyclical and value stocks appeared to be coming back into vogue, despite a surge in reported Covid-19 cases that threatens to wreak fresh havoc in the short-term on the services industry in particular. The U.S. reported over 1 million new cases on Monday, far surpassing the one-day record for any country in the world. However, even in countries where the new Omicron strain has become dominant, such as South Africa, the wave of infections has peaked without overwhelming local the local healthcare system. As such, many market participants are prepared to bet that Omicron will signal the beginning of the end of the pandemic, resulting in faster progress toward herd immunity with only minor associated economic damage.

Among early movers, Ford Motor Company (NYSE:F) stood out with a 7.1% gain after the Detroit giant said it plans another big increase in output of its all-electric F-150 pickup truck. The company said it aims to be in a position to produce 600,000 electric vehicles (not just the F-150 model) within two years. Ford still has a window to build a solid position in the electric truck market, given the slow progress in Tesla's Cybertruck project. That's in contrast to the market for sedans and SUVs, where Tesla's record fourth-quarter deliveries underlined how strong its first-mover advantage is in those segments. 

Elsewhere, Warner Music (NASDAQ:WMG) fell 4.7% after strategic shareholder Access Industries offloaded a 1.6% stake in the company, while in ADRs, Internet giants continued their retreat from empire under pressure from antitrust regulators in Beijing. Sea ADRs fell 9.7% to their lowest in over a year as Tencent Holdings (OTC:TCEHY) said it will convert its class B voting stock in the company into class A stock. That makes it fungible with the southeast Asian company's ADRs and increases the likely market overhang on them. 

 

Wall Street Opens at Fresh Highs on Omicron Hopes; Dow up 225 Pts
 

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Comments (5)
Chad RicherThanYou
Chad RicherThanYou Jan 04, 2022 12:10PM ET
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Nasdaq limit down
Matthew VS
Matthew VS Jan 04, 2022 11:44AM ET
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But the NASDAQ is going to wipe out the DOW's gains for a huge loss today.
Pezhman Parsi
Pezh Jan 04, 2022 10:52AM ET
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I wonder if there are any news that are bad for Wall Street ?  Oil goes up is great , Oil goes down is great, Covid is great, omicron is great, inflation is great, Cancelled flights is great, jobless is great, less traveling is great. Still ATH. I really wonder if there is any news that is bad ? please someone share it with me so i can look it up..
Mitchel Pioneer
Mitchel Pioneer Jan 04, 2022 10:52AM ET
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Everything is "priced in" to the US Ponzi Scheme, even at the most grossly overvalued levels in history.
Gus McCrae
Gus McCrae Jan 04, 2022 10:52AM ET
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the only thing that matters is the Fed ACTUALLY reducing their support. everything else is just noise
Mitchel Pioneer
Mitchel Pioneer Jan 04, 2022 10:41AM ET
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Omicron "hopes" all the way to 40K on the DOW, and 5K on the S&P, which has been their target all along.  We could have a global economic catastrophe, and the US Ponzi Scheme would still "rally."  Greatest financial fraud on earth.
Stephane Adam
Stephane Adam Jan 04, 2022 10:32AM ET
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I don't believe at all in the possibility of a collective immunity with Omicron. it is proven that people who had Covid can get it again. In the same way that the vaccine does not prevent to catch and to transmit the virus, only slowing down the gravity of the disease. the epidemic will stop when the virus decides to stop.
Gus McCrae
Gus McCrae Jan 04, 2022 10:32AM ET
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who cares
Ronald Warren
Ronald Warren Jan 04, 2022 10:32AM ET
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You haven't caught it yet. Have you?
 
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