U.S. stock benchmarks rose Monday afternoon, with gains in technology and energy shares helping to establish an intraday record for the S&P 500. That could bring its 69th record close of 2021.
But travel-related names were under pressure after surging COVID-19 cases triggered hundreds of U.S. flights to be scrapped over the holiday weekend.
How are stock benchmarks trading?
- The S&P 500 SPX, +1.12% rose 54 points, or 1.2%, to 4,780, with the broad-market benchmark setting an intraday record at 4,784.72.
- The Dow Jones Industrial Average DJIA, +0.71% climbed 273 points, or 0.8%, to reach 36,223 and heading toward its fourth-highest close ever.
- The Nasdaq Composite Index COMP, +1.17% climbed 191 points, or 1.2%, to around 15,844.
Ahead of the long holiday weekend, Thursday’s session saw the S&P 500 rise 0.6% to 4,725.79, a new closing record. The Dow gained 196.67 points, or 0.6%, to end at 35,950.56 and the Nasdaq Composite climbed 0.9% to 15,653. For the week, the Dow rose 1.7%, the S&P 500 gained 2.3% and Nasdaq added 3.2%.
What’s driving the stock market?
Optimism that the latest wave of COVID-19 won’t severely disrupt the U.S. economy pushed stocks higher on Monday, even as coronavirus upended Christmas travel, and White House medical adviser Dr. Anthony Fauci warned against complacency over the omicron variant. Fauci said the new wave of infections could end up swamping hospitals even if many cases appear mild.
Hundreds more U.S. flights were canceled Monday as surging COVID-19 infections triggered quarantines for airline staff. Shares of American Airlines AAL, -0.52%, Delta Air Lines DAL, -0.83%, Jetblue Airways Corp JBLU, -0.92%, and United Airlines UAL, -0.71% were down, with cruise operator Carnival CCL, -1.37% also trading lower.
While travel was a mess, the retail side of the economy appeared to be holding up, with Mastercard Spending Pulse reporting that holiday sales rose 8.5% against a year earlier, the biggest annual gain in 17 years.
“Despite the variant, consumers are resilient,” said Peter Cardillo, chief market economist at Spartan Capital Securities, in a phone interview.
“With COVID and high inflation, you’d think that might have taken a bite out of the consumer spending spirit, but it didn’t,” he said. “Of course, down the road when interest rates finally begin to move higher, that might slow any major gains ahead, in terms of the stock market. But for now, it’s a green light.”
The week ahead may see lower volumes than normal, as investors take an extended break. Many will be watching for the start of the so-called Santa Claus rally, a seasonally bullish period in the last five trading sessions of a year and the first two in the new year.
“The focus among investors and traders continues to remain on three important factors. Firstly, the economic data — traders would like to see more strength in the economic numbers, then you have the ongoing omicron COVID infection ratio — this is increasing for the last number of weeks, and finally the hawkish monetary policy stance among central bankers,” said Naeem Aslam, chief market analyst at AvaTrade.
Aslam said there are concerns that post-New Year’s Eve will see more spikes in infections, or governments clamping down ahead of time.
“The fact is that no one wants to see another total lockdown as they have an adverse influence on the economy. The world is still suffering from supply bottleneck shortages due to COVID restrictions introduced last year,” he said, in a note to clients.
What stocks are in focus?
- Tesla Inc. TSLA, +3.10% shares rose 3.6%, on pace to gain almost 24% over four straight days of gains, according to Dow Jones Market Data.
- GoDaddy Inc. shares shot up 8% toward a near five-month high Monday, after The Wall Street Journal reported that hedge fund Starboard Value LP has acquired a 6.5% stake in the company.
- Shares of Alibaba Group Holding Ltd. BABA, -1.61% were down 1.4% Monday, after China’s securities regulator released draft rules that would allow the overseas listing structure known as a variable-interest entity (VIE) used by the e-commerce giant to list its shares on the NYSE.
- BridgeBio Pharma BBIO, -71.94% shares sank 71.6% after the pharmaceutical company said a Phase 3 trial for a key drug failed to meet key endpoints.
- Shares of Microbot Medical Inc. MBOT rocketed over 54% toward a nine-month high on heavy volume Monday, after the preclinical medical device company announced an agreement with Stryker Corp. SYK to develop the first dedicated robotic procedural kits for use in certain neurovascular procedures. Shares of Stryker were up around 0.6%.
- News Corp NWS announced Monday an agreement to buy the Base Chemicals business from S&P Global Inc. SPGI and IHS Markit Ltd. INFO for $295 million in cash. News Corp Class A and B shares were about 1.4% higher.
How are other assets trading?
- The yield on the 10-year Treasury note TMUBMUSD10Y, 1.482% slipped slightly to 1.482%. Yields and debt prices move opposite each other.
- The ICE U.S. Dollar Index DXY, +0.08%, a measure of the currency against a basket of six major rivals, was 0.1% higher.
- Oil futures rose, with the U.S. benchmark CL00, +2.36% adding 2.4% to settle at $75.57 a barrel, while gold futures GC00, -0.11% gained 0.2% to settle at $1,808.80 an ounce.
- Bitcoin BTCUSD, 0.06% gained 0.5% to $51,320.
- The Stoxx Europe 600 index SXXP, +0.62% closed up 0.6%, while London markets were closed in observance of Boxing Day.
- The Shanghai Composite SHCOMP, -0.06% was flat, while the Hang Seng Index HSI, +0.13% was closed and Japan’s Nikkei 225 NIK, -0.37% fell 0.3%.
—Barbara Kollmeyer contributed reporting to this article.