U.S. stock benchmarks were trading mixed Wednesday afternoon, but have recovered substantial ground this week to trade back near record highs, helped by news suggesting the omicron variant of the coronavirus may not disrupt economies as much as feared.
A report from Pfizer and BioNTech indicating that a third dose of their COVID-19 vaccine neutralized omicron in laboratory tests, but that a two-dose regimen is less effective, was being weighed by investors.
How are stock benchmarks trading?
- The S&P 500 index SPX, +0.28% rose by about 8 points, or 0.2%, to 4,695, with the broad-market index’s record closing high at 4,704.54.
- The Dow Jones Industrial Average DJIA, +0.11% edged up 12 points, or less than 0.1%, to 35,728 and has wavered throughout the session.
- The Nasdaq Composite Index COMP, +0.54% saw its gains firm, up 72 points, or 0.5%, to reach 15,759, but did touch an intraday low at 15,618.88.
On Tuesday, the Dow Jones Industrial Average DJIA, +0.11% rose 492.4 points, or 1.4%, to 35,719.43, the S&P 500 index SPX, +0.28% advanced 95.08 points, or 2.1%, to 4,686.75 and the Nasdaq Composite COMP, +0.54% jumped 461.76 points, or 3%, to 15,686.92.
What’s driving the market?
Stocks indexes were aiming for a third day of gains, after the Dow industrials rallied over 1,100 points in the last two sessions, with investors hunting for bargains in the wake of selling after the omicron variant in South Africa was announced in late November.
“In theory, such strong gains are sign of instability and should be taken with caution, however the good news is that the volatility is easing, and the VIX index dropped 20% yesterday, meaning that the latest fears could slowly begin fading,” said Ipek Ozkardeskaya, senior analyst at Swissquote in a note to clients.
Stock-index futures jumped early Wednesday after Pfizer and BionTech reported results from an “initial laboratory study” showing their COVID-19 vaccine neutralized the omicron variant of the coronavirus after three doses — the full two-dose regimen plus a booster shot.
The Pfizer report came after, a small study from South African scientists showed that the variant may partially evade vaccines, but vaccinations should still defend against more serious disease. Those doubly vaccinated with a previous COVID infection showed greater resistance to the variant, raising hopes that boosters may keep people safer, the study showed.
GlaxoSmithKline’s GSK, +1.02% GSK, +0.92% assessment that its antibody treatment also appears to work against omicron, cheered investors on Tuesday.
But elsewhere, there were reports of a “stealth” omicron offshoot that was more difficult to identify via standard PCR tests, with Australia’s Queensland government confirming one case, and others found in South Africa and Canada.
Also lifting markets lately is the perception that the Federal Reserve’s more hawkish tilt has been digested and priced in, said Ozkardeskaya, but the analyst and others remain wary.
“While the buy-everything trade will have its day in the sun for the rest of this week, some serious non-virus risk points are looming,” Jeffrey Halley, senior market analyst at OANDA, told clients in a note. “Friday sees US CPI [consumer price inflation] and a print at or above 7.0% is going to raise the heat at next week’s FOMC.”
The cost of living jumped 0.9% in October and rose 6.2% annually, the highest rate since November 1990.
Economists polled by Dow Jones Newswires and The Wall Street Journal are forecasting CPI to rise 0.7% for November and 6.7% annually. That data comes ahead of Wednesday’s JOLTS job openings for October, which are expected to rise to 10.6 million from 10.4 million.
What companies are in focus?
- U.S. listed shares of Chinese social-media company Weibo Corp. WB, -1.64% fell 2.8% after shares of the company sank in their Hong Kong trading debut, falling more than 7%.
- Stock in Stitch Fix SFIX, -22.11% slumped 23% after the company, which sells clothing through subscriptions and more, issued disappointing guidance.
- Investors will be watching shares of crypto-pegged companies, including Coinbase Global Inc. COIN, +0.09%, whose executives will be testifying to Congress. Shares of Coinbase were up 0.9% early Wednesday.
How are other assets trading?
- The yield on the 10-year Treasury note TMUBMUSD10Y, 1.510% rose nearly 3 basis points to 1.51% Wednesday. Treasury yields and prices move in opposite directions.
- The ICE U.S. Dollar Index DXY, -0.49%, a measure of the currency against a half-dozen other monetary units, was down 0.5% at 95.884.
- In oil futures, West Texas Intermediate crude CL00 for January delivery CLF22, +0.65% closed up at a two-week high, up 0.4% to $72.36 a barrel.
- Gold futures GC00, +0.13% for February delivery GCG22, +0.13% gained less than 0.1% at $1,785.50 an ounce.
- The Stoxx Europe 600 Index SXXP, -0.59% slipped 0.6%, while London’s FTSE 100 Index UKX, -0.04% finished virtually unchanged at 7,337.05.
- In Asia, the Shanghai Composite Index SHCOMP, +1.18% closed 1.2% higher, while the Hang Seng Index HSI, +0.06% was rose 0.06% in Hong Kong and China’s CSI 300 000300, +1.50% advanced 1.5%. Japan’s Nikkei 225 Index NIK, +1.42% closed up 1.4%.
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