Dow Jones Industrial Average
had one of its best days this year on Monday, when value and defensive stocks led to a decline from last week’s market declines.
The news on Monday was relatively positive, with signs that the Omicron variant of Covid-19 may be less serious than previous strains and reports that China is considering easing monetary policy. On the Federal Reserve’s political front, recent reporting suggested that the central bank could announce plans at its next meeting to withdraw more quickly from its bond buying program.
The Dow index rose by 647 points, or 1[ads1].9%, for its best one-day point increase since November 2020 and the largest percentage increase since March last year. The
closed up 1.2% and the Nasdaq Composite rose 0.9%, while small-cap
increased 2.1%, for its fourth consecutive daily draw of 2% or more.
Shares at the reopening after the pandemic were among the biggest gains on Monday. The
US global jets
exchange traded fund (ticker: JETS) added 5.3%, which
American Airlines Group (AAL) added 7.9% and
United Airlines Holdings (UAL) jumped 8.3%. Cruise lines
carnival (CCL) and
Royal Caribbean Cruises (RCL) increased by 8.0% and 8.3%, respectively.
Marriott International (MAR) 1a to 4.5%,
Live Nation Entertainment (LYV) increased 6.1%, and
Cinemark Holdings (CNK) rose 7.7%.
The S&P 500 value shares as a group rose by 1.4% on Monday, against an increase of 0.9% for growth shares in the index.
Investor attention is still focused on the newly discovered Omicron variant of the corona virus, the news that recently gave Dow the worst day of the year and saw volatility in the rock markets last week. The latest headline driving sentiment comes from South Africa, where data – but from a small sample size – suggest that the symptoms caused by Omicron were milder than with other variants.
However, investors are not out of the woods yet. The broad market will remain sensitive to daily headlines about Omicron – both good and bad.
“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 figure out exactly what’s going on.”
On Monday, the news was positive and investors bought the market. All 11 S&P 500 sectors closed in green.
Fed policy has pushed investor sentiment the other way. 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 the markets, amid higher inflation.
“We are really at a fascinating crossroads in the markets at the moment,” said Jim Reid, a strategist at Deutsche Bank. “Market sentiment on the virus and Fed decision – makers is moving in opposite directions.”
These trends mean different things for different types of stocks and indices.
If Omicron is less serious than feared, the economy may hold up better than expected. It would be good for economically sensitive cyclical stocks, like many of those in the Dow. However, higher bond yields and interest rates may put downward pressure on stock valuations, especially those with nosebleed-price-to-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.”
The technology-heavy index jumped from a loss of around 1% shortly after Monday’s opening clock.
In the commodities sector, oil prices rose on Monday after Saudi Arabia raised January prices for Asian and US customers by $ 0.60 over the weekend, as a sign of stronger demand expectations.
Forward contracts for the international oil reference Brent rose 4.6%, to over $ 73 per barrel, with US futures for West Texas Intermediate oil up 4.9% to around $ 69.50 per barrel.
“Given that OPEC + continues 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.
the two leading cryptocurrencies, remained outside their lowest levels after the strong fall on Saturday, but fell after stabilizing on Sunday. Bitcoin traded around $ 49,000 – down from more than $ 57,000 as late as Friday – with Ether holding over $ 4,000.
Here are several stocks on the move on Monday:
Nvidia (ticker: NVDA) was among the most traded stocks in the US on Monday, closing down around 2.1%. The shares of other semiconductor companies Advanced Micro Devices (AMD) lost 3.4%.
Lucid group (LCID) shares fell 5.1% after the start-up of electric vehicles revealed that it had received a subpoena from the Securities and Exchange Commission, without giving much detail.
Kohls (KSS) received 5.4% after an activist investor said they should explore selling themselves.
Modern (MRNA) fell 13.5% after the president said the risk of vaccines not working as well against Omicron is high. Pfizer (PFE) shares fell more than 5%.
Alibaba Group Holding (BABA) shares closed up 10.4% after a management shock in the e-commerce giant.
the German bank (DB) rose 3.6% after JPMorgan upgraded the bank to overweight from neutral, adding that the group shows positive income development in key divisions.
Roche (ROG.Switzerland) rose 1.5% in Zurich after announcing that they would release rapid antigen tests for Covid-19 and the flu virus next month.
Food delivery group
Bare Eat Takeaway.com (JET.UK) fell 4.9% 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 email@example.com