US Stocks Rebound Following Recent Sell-Offs as Omicron Variant Concerns Subside

Last Updated: Thursday, December 2, 2021 4:38 PM | MT Newswires

US stocks closed higher Thursday following recent sell-offs as concerns regarding the COVID-19 omicron variant appear to have subsided with reports that it may be less deadly than feared, and as investors looked ahead to non-farm payroll data on Friday.

The Dow Jones Industrial Average jumped 1.8% to 34,639.79, the S&P 500 was up by 1.4% to 4,577.10 and the Nasdaq Composite was higher by 0.8% to 15,381.32. All sectors were in the green, led by industrials, energy and financials.

The 10-year US Treasury yield was nearly 1 basis point higher at 1.443%.

Several media reports citing scientists and a statement from the World Health Organization have allayed concerns that the omicron variant might become more dangerous than the highly transmissible delta variant. WHO Chief Scientist Soumya Swaminathan in a press briefing said vaccines will "likely" offer some protection against the new variant, Bloomberg said, a week after the organization labeled it as a "mutation variant of serious concern."

Meanwhile, GlaxoSmithKline (GSK) and Vir Biotechnology's (VIR) Xevudy got the UK's Medicines and Healthcare products Regulatory Agency approval for patients with mild-to-moderate cases of COVID-19 who are at risk of developing severe disease, the regulator said. The duo said preclinical data showed sotrovimab retains "activity against all tested variants of concern, including key mutations of omicron," a new COVID-19 strain that has underpinned the recent market sell-offs.

The heads of Moderna (MRNA) and BionTech (BNTX) recently expressed divergent views over the efficacy of the current crop of vaccines against omicron.

In other economic news, the Chicago Board of Exchange's volatility index, VIX, a real-time gauge that represents the market's expectations for volatility over the coming 30 days, retreated 11%, after hitting its highest level since January on Wednesday. Market uncertainty has increased following mixed messaging over omicron and the prospects of a quicker tapering of the Federal Reserve's asset purchasing program.

Initial jobless claims rose by 28,000 to 222,000 in the week ended Nov. 27 after falling to a 52-year low in the previous week on seasonal adjustment issues related to the Thanksgiving holiday.

In a separate report released earlier in the day, Challenger, Gray & Christmas reported that layoffs fell to a 28-year low in November as firms struggled to just to keep current workers and hire new ones.

"With the omicron variant emerging and the unknowns that come with its spread, coupled with the ongoing difficulty hiring and retaining workers, it's no surprise job cuts are at record lows," said Andrew Challenger, the company's senior vice president. "Employers are spread thin, planning best- and worst-case scenarios in terms of COVID, while also contending with staff shortages and high demand."

In company news, Kroger's (KR) reported fiscal third-quarter results that beat estimates as the retail group benefited from what it described as a permanent shift to at-home food consumption, helping it raise profit guidance on the back of a strong holiday season. Shares jumped 11%, the most on the S&P 500.

PVH (PVH) dropped 4.1%, the second-worst performer on the S&P 500 after it said "significant" US port delays during October trimmed its fiscal third-quarter revenue, which missed expectations.

Okta (OKTA) shares surged 11.7% after it reported fiscal third-quarter sales that beat expectations and projections for the fourth quarter came in better than consensus.

West Texas Intermediate crude oil advanced 1.9% to $66.84 a barrel. The Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russia reportedly agreed on Thursday to increase joint production, as planned, by 400,000 barrels a day in January.

In the metals markets, gold was down 0.8% to $1,769.50, silver was up 0.3% to $22.41 an ounce but copper was up 1% to $4.29 per pound. Among energy ETFs, the United States Oil Fund was up 2.7% to $48.30 while the United States Natural Gas Fund was down 3.2% to $13.46.

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