Wall Street rebounds after virus-related sell-off

Among the S&P’s 11 major sectors, technology was the leading percentage gainer, up 2.6 per cent, followed by the consumer discretionary sector, which closed up 1.6 per cent, with boosts from Amazon.com and Tesla Inc. — Reuters pic
Among the S&P’s 11 major sectors, technology was the leading percentage gainer, up 2.6 per cent, followed by the consumer discretionary sector, which closed up 1.6 per cent, with boosts from Amazon.com and Tesla Inc. — Reuters pic

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NEW YORK, Nov 30 — Wall Street stocks closed higher yesterday, regaining some of the ground they lost in Friday’s sell-off, as investors were hopeful that the Omicron coronavirus variant would not lead to lockdowns after reassurance from US President Joe Biden.

The Nasdaq led gains among the major averages with help from the technology sector, while the S&P and the Dow advanced after suffering their biggest one-day percentage declines in months in Friday’s holiday-shortened session as investors worried that the latest Covid-19 variant would cause economic disruption.

Biden said yesterday that Omicron-related lockdowns were off the table for now and he urged Americans not to panic about the variant. However, he did recommend vaccination and mask wearing indoors to combat the virus and said the United States was working with pharmaceutical companies to make contingency plans if new vaccines were needed.

Those comments and indications from drug companies that they are taking the variant seriously were reassuring for investors, who had been anxious about the potential for further Covid restrictions.

“Friday was a major de-risking event. You had the market go back to its worst fears of Covid spreading and the return of lockdowns,” said Edward Moya, senior market analyst at OANDA.

“Now you’re starting to see there is some optimism when you listen to the President, when you listen to the Pfizer CEO. The Omicron panic is easing, and we’re into a period of wait and see.”

Vaccine makers such as Pfizer, its partner BioNTech and their rivals Moderna and Johnson & Johnson said yesterday they are working on vaccines that specifically target Omicron in case existing shots are not effective against the variant. nFWN2SK0VH]

“It’s not like the start of the pandemic all over again,” said Carol Schleif, deputy chief investment officer for the BMO family office in Minneapolis who also noted that after Friday’s knee-jerk reaction, investors have been trained this year to buy the dip. “People are willing to just take a deep breath and try to reassess, be a little more patient.”

The Dow Jones Industrial Average rose 236.6 points, or 0.68 per cent, to 35,135.94, the S&P 500 gained 60.65 points, or 1.32 per cent, to 4,655.27 and the Nasdaq Composite added 291.18 points, or 1.88 per cent, to 15,782.83.

Among the S&P’s 11 major sectors, technology was the leading percentage gainer, up 2.6 per cent, followed by the consumer discretionary sector, which closed up 1.6 per cent, with boosts from Amazon.com and Tesla Inc.

Other big boosts from single stocks in the S&P came from Microsoft and Apple Inc, which gained ground after HSBC raised its price target for the iPhone maker.

While the Dow advanced, it underperformed its peers with pressure from Merck & Co Inc, which closed down 5.4 per cent. The drugmaker extended losses from Friday when updated data from a study of its experimental Covid-19 pill showed lower efficacy in reducing risk of hospitalisation and deaths than previously reported.

Britain said it would offer a Covid-19 booster vaccine to all adults and give second doses to children aged between 12 and 15, in light of concern about the spread of the Omicron variant. It also said Moderna and Pfizer vaccines were the preferred boosters.

After the US market close, the US Centres for Disease Control and Prevention said everyone aged 18 years and older should get boosters six months after Pfizer or Moderna Covid vaccines or two months after a Johnson & Johnson shot.

Moderna rose 11.8 per cent on the day, while Pfizer fell almost 3 per cent and Johnson & Johnson rose 0.34 per cent.

The Philadelphia semiconductor index outperformed the broader market with a 4 per cent gain as chipstocks rose broadly. Nvidia provided the biggest boost with a 5.9 per cent gain.

Tesla’s shares gained 5 per cent after a report that chief Elon Musk urged employees to reduce the cost of vehicle deliveries.

Twitter Inc closed down 2.7 per cent, reversing early gains after the social media firm said CEO Jack Dorsey will step down and be succeeded by Chief Technology Officer Parag Agrawal. Dorsey had been in the unusual position of having the CEO job at two major technology companies, the second being digital payments firm Square Inc

Advancing issues outnumbered declining ones on the NYSE by a 1.31-to-1 ratio; on Nasdaq, a 1.35-to-1 ratio favoured decliners.

The S&P 500 posted 16 new 52-week highs and 21 new lows; the Nasdaq Composite recorded 39 new highs and 344 new lows.

On US exchanges, 11.13 billion shares changed hands yesterday compared with the 10.84 billion average for the last 20 sessions. — Reuters

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