Stocks Rise as Investors Shrug Off Omicron Worries
Oil stabilizes, Moderna jumps as vaccine maker says it is working on booster for new variant
Index performance
Source: FactSet
Note: Markets closed at 1 p.m. ET on Friday.
As of Nov. 29, 2:35 p.m. ET
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By Caitlin Ostroff, Alexander Osipovich and Frances Yoon
Updated Nov. 29, 2021 1:19 pm ET
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Stocks and oil prices bounced back from Friday’s selloff, with investors betting that the Omicron Covid-19 variant will cause less damage to the global economic recovery than initially feared.
The S&P 500 jumped 1.7% in afternoon trading Monday, recouping many of its losses after the index suffered its worst one-day percentage decline in nine months. Friday’s selloff came after South Africa identified a fast-spreading strain of the coronavirus, which the World Health Organization has named Omicron, and countries around the world responded with a fresh wave of travel restrictions.
The Nasdaq Composite advanced 2.2% on Monday, boosted by investor appetite for technology stocks. The Dow Jones Industrial Average added more than 350 points, or about 1%.
Brent crude futures, the benchmark in global oil markets, rose 3.2% to $75.07 a barrel. They tumbled more than 10% Friday, in their largest one-day percentage decline since April 2020.
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“Friday was a panic selloff,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “Traders have had time to sit back and breathe a bit,” she added, noting that trading volumes were lower over the Thanksgiving holiday weekend, likely exacerbating declines.
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Investors are awaiting more clarity on the transmissibility and severity of the Omicron variant and data on how well it can be contained by existing vaccines. Renewed travel bans and coronavirus restrictions could threaten the global recovery. In some of the tougher moves so far, Israel has banned foreigners from entry and Japan has said it would close its borders to foreign visitors until more information about the new variant is available.
President Biden said Monday that Omicron was “not a cause for panic.” The administration is working with drug companies to develop contingency plans for vaccines or boosters in case they are needed to fight the new variant, he said. Some analysts expect the economic impact of Omicron to be limited as vaccine manufacturers update their shots to combat it.
Investors sold out of government bonds Monday.
PHOTO: RICHARD DREW/ASSOCIATED PRESS
“There’s less likelihood we see sustained downside from something like a variant because our ability to adapt to it is higher than it was,” said Hani Redha, a portfolio manager at PineBridge Investments. “The ability to tailor vaccines makes a huge difference.”
Moderna shares shot up 10%. The biotech company’s stock surged more than 20% Friday after Moderna said it was working to rapidly advance an Omicron-specific booster candidate. U.S.-listed shares of BioNTech, which produces a Covid-19 vaccine with Pfizer, added 3.8% Monday.
Travel and leisure stocks largely rebounded after steep losses on Friday, although trading was choppy. Royal Caribbean Group added 3.9%, while rival cruise operator Carnival rose 2.1%. Delta Air Lines and American Airlines Group gained 0.9% and 1.2%, respectively.
Technology was the best-performing sector of the S&P 500. Microsoft rose 2.5%, while Apple added 2.4%.
Shares of Twitter slipped 0.6% after the social-media company said Jack Dorsey was stepping down as CEO, effective immediately.
Bitcoin rebounded after the largest cryptocurrency was pummeled by Friday’s selloff. The dollar value of bitcoin rose more than 4% from its 5 p.m. ET level Sunday to about $58,600. Its gains boosted cryptocurrency exchange Coinbase Global, whose shares rose 5.2%.
Investors sold U.S. government bonds, which are viewed as safe assets to hold, pushing up yields. The yield on the benchmark 10-year Treasury note rose to 1.526% from 1.484% Friday.
Overseas, the pan-continental Stoxx Europe 600 rose 0.7%.
Covid Fears
Investor concerns about the Omicron variant's economicimpact sent most Asian stock indexes lower
One-month performance
Source: FactSet
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Major stock indexes in Asia fell. Tokyo’s Nikkei 225 index dropped 1.6% to its lowest closing level in a month and a half. The benchmark declined 2.5% Friday.
Hong Kong’s Hang Seng Index and South Korea’s Kospi each fell around 1%, while Australia’s S&P/ASX 200 index fell 0.5% after the country tightened border controls over the weekend.
—Rebecca Feng contributed to this article.
Write to Caitlin Ostroff at
caitlin.ostroff@wsj.com and Frances Yoon at
frances.yoon@wsj.comCopyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8