Market Bulls Push Up U.S. Stocks, Treasury Yields As Omicron Fears Abate

NEW YORK:U.S. stock indexes and yields on U.S. Treasuries both climbed on Thursday as investors and traders were optimistic about positive economic data and the impact of the Omicron coronavirus variant on the economy, even as COVID-19 case counts soar.

Consumer spending rose 0.6% last month, and the number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week.

There are signs that Omicron is less likely to lead to hospitalization, and a U.S. Federal Drug Administration official said that data indicated that both Merck’s and Pfizer’s COVID-19 anti-viral pills are effective against the variant.

“Today is a very calm day; it’s the relief over Omicron apparently not being as bad as we feared,” said Ryan Detrick, chief market strategist at LPL Financial. “What remains impressive is how strong the consumer remains. It’s a positive sign as we head into 2022. The economic backdrop is on very strong footing.”

“The bull might have a few more tricks up his sleeve before the year ends,” Detrick added.

The Dow Jones Industrial Average rose 0.8% to 36,039.74 and the S&P 500 gained 0.79% to 4,733.86. The Nasdaq Composite added 0.96%, to 15,671.44.

MSCI’s gauge of stocks across the globe gained 0.86%.

As investors pulled money out of safe-haven assets, the benchmark 10-year yield on U.S. Treasuries was up 3.5 basis points at 1.4926% in afternoon trading. The Treasury markets closed at 2 p.m. ET due to the holiday weekend.

The rise of risk-on investments ahead of Christmas, dubbed a “Santa Claus rally” by traders, also nudged gold and oil higher.

The dollar edged lower on Thursday afternoon.

The trading session so far has put markets on course for a third successive day of gains as they recovered from a jolt on Monday when worries about Omicron pushed investors to safe-haven assets like the greenback.

The risk of needing to stay in the hospital for patients with the new variant is 40% to 45% lower than for patients with the Delta variant, according to research by London’s Imperial College published on Wednesday.

Oil prices extended gains on Thursday as the signs the worst effects of the Omicron variant might be containable prevailed over the threat of new travel curbs.

U.S. crude recently rose 1.24% to $73.66 per barrel and Brent was at $76.71, up 1.89% on the day.

Spot gold added 0.3% to $1,807.91.

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