NEW YORK:U.S. stock indexes and oil prices made gains on Wednesday after investors cheered positive economic data and the White House said it was resuming talks on a major social spending bill with a senator crucial to passing the legislation.
The market opened mostly flat on jitters about the Omicron COVID-19 variant but gained throughout the trading session, pushed upward by improving consumer confidence and gross domestic product growth. The positive swing continued Tuesday’s trend, when stocks recouped losses.
“With COVID fears, there’s not as much worry as before,” said Anu Gaggar, global investment strategist for Commonwealth Financial Network. “It may not have as much of an impact on the economy. (U.S. President Joe) Biden has said we won’t go back to lockdown.”
The White House said on Wednesday that it would continue talks with Senator Joe Manchin, who delivered what appeared to be a fatal blow to Biden’s Build Back Better bill over the weekend by saying he would not support it.
Gaggar added that volatility in December has been much higher than usually seen, and that her conviction is that the “Santa Claus rally is slightly lower this year.”
The so-called “Santa Claus rally” is the last five trading days of the year and the first two of the next year, when stocks often are higher. According to an article from LPL Financial, if Santa does not come, it could portend a bear market.
Riskier currencies such as the Australian dollar recovered against the U.S. dollar on Tuesday, while U.S. Treasury traders discounted the threat of long-term inflation as the yield curve flattened.
The Dow Jones Industrial Average rose 0.49% to 35,668.3, while the S&P 500 gained 0.63% to 4,678.65. The Nasdaq Composite added 0.66% to 15,441.98.
MSCI’s gauge of stocks across the globe gained 0.73%.
Oil prices climbed as fears of tight supply and drawdowns in the United States offset concerns about COVID-19 dampening demand. U.S. crude recently rose 2.49% to $72.89 per barrel and Brent was at $75.42, up 1.95% on the day.
Little is known about the severity or transmissibility of the Omicron variant. The World Health Organization’s chief scientist said on Monday that it would be “unwise” to conclude from early evidence that Omicron is a milder variant than previous ones. The WHO also said it was still too soon to say if Omicron is more transmissible than Delta.
A South African study suggested reduced risks of hospitalization and severe disease in people infected with the Omicron coronavirus variant versus the Delta one, although the authors said some of that is likely due to high population immunity.
Meanwhile, Biden warned Americans about the risks of being unvaccinated and brought military personnel to support overwhelmed hospitals.
The United States also authorized Pfizer Inc’s antiviral COVID-19 pill for at-risk people aged 12 and above.
Currency market moves were generally muted as trading slowed before the Christmas holidays. The U.S. dollar index fell 0.361%.
Elsewhere, cryptocurrencies slipped slightly, with bitcoin up 0.07% to $48,963.06, still well below the all-time high of $69,000 hit in November.
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