By Lewis Krauskopf, Medha Singh and Bansari Mayur Kamdar
(Reuters) – Wall Street’s main indexes rose solidly for a third straight session on Thursday after more encouraging developments about the impact of the Omicron variant of the coronavirus, lifting the mood ahead of Christmas break.
The S&P 500 was near its intraday record high as most sectors gained. Industrials and consumer discretionary were the top-performing sectors, both up about 1.3%.
Vaccine makers AstraZeneca Plc and Novavax Inc said their shots protected against Omicron as UK data suggested it may cause proportionally fewer hospital cases than the Delta variant, though public health experts warned the battle against COVID-19 was far from over.
The arrival of Omicron has helped ratchet up market volatility for much of the last month of 2021, which has been a strong year for equities.
“There was a lot of negative sentiment coming into the final part of the year, and investors have likely continued to see pretty strong economic growth and pretty positive developments as it relates to healthcare innovation around COVID and that is putting in a bit of a bid into equities and causing investors to look to allocate capital as they close out the year,” said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management.
The Dow Jones Industrial Average rose 223.25 points, or 0.62%, to 35,977.14, the S&P 500 gained 34.28 points, or 0.73%, to 4,730.84 and the Nasdaq Composite added 154.23 points, or 0.99%, to 15,676.12.
Defensive sectors, which have mostly outperformed in December, lagged on Thursday, with real estate down 0.9%.
Trading volumes were expected to be thinner than usual ahead of the Christmas and New Year holidays. The stock market will be closed on Friday in observance of the Christmas holiday.
In another medical development against the pandemic, the United States authorized Merck & Co’s antiviral pill for COVID-19 for certain high-risk adult patients, a day after giving a broader go-ahead to a similar but more effective treatment from Pfizer Inc. Merck shares slipped 0.4%, while Pfizer shares were off 2%.
“Last holiday season, there was an equal spike in cases, but now we have so many more weapons in our arsenal to fight COVID-19 and that is a very different outlook,” said Christopher Grisanti, chief equity strategist at MAI Capital Management in New York.
The number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week as the labor market tightens, while consumer spending increased solidly, putting the economy on track for a strong finish to 2021.
Tesla Inc shares rose 5.5%, gaining sharply for a second day after Chief Executive Elon Musk said on Wednesday he was “almost done” with his stock sales after selling over $15 billion worth since early November.
The S&P 500 is up about 26% so far this year. Still, the environment for equities could be changing heading into next year as the Federal Reserve is expected to begin raising interest rates in 2022.
Advancing issues outnumbered declining ones on the NYSE by a 2.81-to-1 ratio; on Nasdaq, a 2.47-to-1 ratio favored advancers.
The S&P 500 posted 34 new 52-week highs and no new lows; the Nasdaq Composite recorded 54 new highs and 70 new lows.
(Reporting by Lewis Krauskopf in New York, Medha Singh and Bansari Mayur Kamdar in Bengaluru; Editing by Uttaresh.V and Matthew Lewis)
