By Jessica DiNapoli
NEW YORK (Reuters) -Wall Street recouped losses after a bruising session the previous day, with oil prices gaining as well as investors turned to riskier assets despite surging Omicron COVID-19 cases globally.
World shares fell earlier in the week after Omicron infections multiplied around the world, but strong corporate earnings and reports that Moderna Inc’s vaccine provides protection against the variant gave investors hope. U.S. stocks also took a hit after President Joe Biden’s social-spending bill was dealt a setback.
“We think this was kind of overdue over the past couple of weeks. We’re kind of set up for a rally in time for Santa Claus, which officially begins next Monday,” said Scott Brown, technical market strategist at LPL Financial.
“We think we’ve had a little bit of a washout. We saw a lot of fear rush into the market.”
The Dow Jones Industrial Average rose about 0.98% to 35,275.42, while the S&P 500 gained 0.58% to 4,593.28. The Nasdaq Composite added 0.53% to 15,060.70.
MSCI’s gauge of stocks across the globe gained 0.76%.
Oil prices rebounded from concerns the spread of Omicron would crimp demand for fuel and signs of improving supply. [O/R]
U.S. crude recently rose 2.59% to $70.39 per barrel and Brent was at $73.15, up 2.28% on the day
The somber U.S. session on Monday underscored market fears that rapidly rising cases of the coronavirus variant would yet again force governments around the world to impose lockdown measures, potentially choking off fragile recoveries from similar measures earlier in the year.
Still, investors were on Tuesday cautiously optimistic that the economic hit would not be as severe this time around, buying stocks and selling perceived safe-haven currencies such as the dollar and the Japanese yen.
Yet while the widespread selling of global shares appeared to have eased, analysts still voiced caution about risks from Omicron.
“COVID remains a threat to the global economy. Initial evidence suggests the Omicron variant is more transmissible but results in less severe illness compared to previous variants,” economists at CBA wrote in a note.
The U.S. Dollar Currency Index =USD was near flat on the day at 96.53 after slipping as low as 96.336 earlier in the session.
The Japanese yen weakened 0.43% versus the greenback at 114.08 per dollar.
Elsewhere, cryptocurrencies – which often offer a reliable gauge to risk sentiment – gained. Bitcoin added over 3% after trending lower in recent weeks.
(Reporting by Jessica DiNapoli in New York; additional reporting by Tom Wilson in London and Julie Zhu in Hong Kong; editing by John Stonestreet, Ed Osmond and Angus MacSwan)
