US stocks rose as investors assessed the uncertain effects of the Omicron variant on the economy.
The S&P 500 rose 0.1% in early trading on Wednesday, a day after the benchmark posted its biggest jump in one day since March and ended a record high. The Dow Jones Industrial Average rose 0.3% and the technology-focused Nasdaq Composite Index fell around 2%.
Vaccine manufacturers diverged, with Moderna falling 0.4% and Pfizer up 2.3%. Pfizer and BioNTech said on Wednesday that a third dose of their Covid-19 vaccine neutralized Omicron in laboratory tests, but that a two-dose regimen was much less effective.
In other corporate moves, Stanley Black & Decker rose 3.8% after the toolmaker said it would sell the majority of its security business assets to Securitas for $ 3.2 billion, buying back $ 4 billion in shares next year.
In Hong Kong, shares of China Evergrande Group fell 5.5% to their lowest level since the difficult real estate company̵[ads1]7;s IPO in 2009. Evergrande did not make payments on any US dollar bonds until a deadline expired on Monday, potentially setting the stage for a solid standard. Hong Kong’s broader Hang Seng index rose less than 0.1 percent.
Elsewhere, equities fell after fainting when the Omicron variant first appeared in late November. Investors have pointed to evidence that Omicron may cause less serious illness than previous variants, although researchers are still considering its virulence and ability to avoid vaccines.
“The markets in general – if you look back at 2021 – have seen through some of the episodes with even partial closure or that kind of risk,” said Willem Sels, chief investment officer for private banking and wealth at HSBC..
“They assume vaccines will be effective or partially effective.”
Sels expects more volatility. “I think we’ll get a lot of flip-flopping,” he said, pointing to uncertain inflation prospects and the potential for mixed economic data next year.
Global markets received another boost this week from Beijing’s measures to stimulate the declining Chinese economy. However, investors are still at odds with the Federal Reserve’s plans to tighten monetary policy to curb inflation in 2022.
One reason why some investors expect inflation to persist is the tight labor market. More evidence of employment difficulties is expected to emerge with the US survey on vacancies and work turnover, which will expire at 10.00 ET. Economists predict that the data will show that employers had more than 10 million vacancies in October.
In the bond market, the yield on 10-year government bonds rose to 1.495% on Wednesday from 1.479% on Tuesday. Bond yields and prices are moving in opposite directions.
The oil price extended a recent rise, partly driven by expectations that the Organization of the Petroleum Exporting Countries and their allies could slow down the pace of production growth in January. Benchmark futures for crude oil in the US rose 0.4% to $ 72.36 per barrel ahead of data on domestic oil supplies at. 10:30
European natural gas prices rose 6% after news reports that Nord Stream 2 could be closed if Russia invades Ukraine. The controversial pipeline connecting Russia and Germany had been expected to start operations in 2022, helping to alleviate Europe’s gas shortages.
The international stock markets were mixed. The pan-continental Stoxx Europe 600 index fell 0.1%, led by retail stocks. The German food delivery company HelloFresh fell 7% after issuing earnings guidance for 2022 that did not meet analysts’ expectations.
China’s Shanghai Composite Index rose 1.2%, Japan’s Nikkei 225 1.4% and India’s BSE S&P Sensex 1.8%.
Write to Joe Wallace at Joe.Wallace@wsj.com
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