The stock market today: Dow rises, Nasdaq falls when Moderna falls again
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Investors are considering Covid-19 and monetary policy heading into a new trading week.
Angela Weiss / AFP via Getty Images
What is good for the goose is not necessarily good for the gander, and what is good for
Dow Jones Industrial Average
is not necessarily good for
Nasdaq Composite.
The news this morning has been quite good, with signs that the Omicron variant may be less serious than previous strains of Covid-19 and reports that China is considering easing monetary policy. Nevertheless, not all US stock indices flourished. Shortly after opening, the Dow rose 304 points, or 0.9%, while
S&P 500
was up 0.2 percent. However, the Nasdaq fell 0.8 percent.
Investor attention is still focused on the new, highly mutated Omicron variant of the corona virus, the news that led to Dow’s worst day of the year and saw volatility in the rock markets last week. The latest headline driving the sentiment comes from South Africa, where data – although of a small sample size – suggest that the symptoms caused by Omicron were milder than with other variants.
“It still feels like we’re in the guesswork phase of figuring out what the effect of Omicron will be,” said Russ Mold, an analyst at broker AJ Bell. “It would be naive to rule out further volatility as markets try to find out exactly what is happening.”
Federal Reserve policy is pushing investor sentiment in the other direction. Fed Chairman Jerome Powell indicated last week that the central bank would consider increasing the pace of its slowdown, or slowdown, of monthly asset purchases, which add liquidity to markets, amid higher inflation.
“We are really at a fascinating crossroads in the markets at the moment. The market sentiment on the virus and the decision makers in the Fed are moving in opposite directions,” said Jim Reid, a strategist at Deutsche Bank.
If Omicron is less severe, the economy may hold up better than expected. It would be good for economically sensitive cyclical stocks, such as those in the Dow. However, higher interest rates are expected to put downward pressure on the valuation of equities, especially those with nosebleed-price-earnings ratios, many of which are found on the Nasdaq. “Like Friday, how Nasdaq trades are likely to determine the day, as markets want to see the technology sector stabilize after intense weakness late last week,” Sevens Reporter Tom Essaye wrote. “If Nasdaq can stabilize, the broad market could bounce.”
In the commodities sector, oil prices rose on Monday after Saudi Arabia raised January prices for Asian and US customers over the weekend by $ 0.60, as a sign of stronger demand expectations.
Forward contracts for international oil reference Brent rose 2.5% to over $ 71.50 a barrel, with US futures for West Texas Intermediate crude up equivalent to more than $ 68 a barrel.
“Given that OPEC + is continuing with its planned increase of 400,000 barrels per day this month, it seems that Saudi Arabia is taking a point that Omicron is a virus in a cup,” said Jeffrey Halley, an analyst at broker Oanda. “Saudi Arabia’s confidence, along with the South African Omicron article over the weekend, is a boost for markets looking for good news in every corner they can find them.”
The cryptocurrency markets remained depressed after digital assets fell over the weekend.
Bitcoin
and
Ether,
the two leading cryptocurrencies, remained outside their lowest levels after the strong fall on Saturday, but fell after stabilizing on Sunday. Bitcoin traded hands over $ 48,000 – down from more than $ 57,000 as late as Friday – with Ether holding over $ 4,000.
Here are six shares on the way on Monday:
Nvidia
(ticker: NVDA) was one of the biggest falls – as well as one of the most traded stocks – in the US, down more than 6.3%.
Kohls
(KSS) gained 6.9% after an activist investor said they should explore selling themselves.
Modern
(MRNA) fell 9.8% after the president said the risk of vaccines not working as well against Omicron is high.
the German bank
(DB) rose 2.3% in Frankfurt after JPMorgan upgraded the bank to overweight from neutral, adding that the group shows positive revenue development in key divisions.
Giant Pharma
Roche
(ROG.Switzerland) rose 1% in Zurich after announcing that they would release rapid antigen tests for Covid-19 and influenza virus next month.
Food delivery group
Bare Eat Takeaway.com
(JET.UK) fell 6% in London after a price target cut and downgrade to Market Perform from Outperform by Bernstein, which sees few positive catalysts in the pipeline for the company.
Write to Jack Denton at jack.denton@dowjones.com
