Dow Today – Market bulls push up U.S. stocks, treasury yields as Omicron fears abate
By Jessica DiNapoli
NEW YORK (Reuters) -U.S. stock indexes and yields on U.S. Treasuries both climbed on Thursday as investors and traders were optimistic about positive economic data and the impact of the Omicron coronavirus variant on the economy, even as COVID-19 case counts soar.
Consumer spending rose 0.6% last month, and the number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week. Two vaccine makers also said their shots protected against Omicron as UK data suggested it may cause proportionally fewer hospital cases than the Delta coronavirus variant.
“Today is a very calm day; it’s the relief over Omicron apparently not being as bad as we feared,” said Ryan Detrick, chief market strategist at LPL Financial. “What remains impressive is how strong the consumer remains. It’s a positive sign as we head into 2022. The economic backdrop is on very strong footing.”
MSCI’s gauge of stocks across the globe gained 0.70%.
As investors pulled money out of safe-haven assets, the 10-year Treasury yield was up 3.3 basis points at 1.4909% in morning trading, with Treasury markets set to close early ahead of the holiday weekend.
The rise of risk-on investments ahead of Christmas, dubbed a “Santa Claus rally” by traders, also nudged gold and oil higher.
Bullish investors likewise left the dollar near a one-week low and lifted riskier currencies such as the Australian dollar and British pound.
It put markets on course for a third successive day of gains as they recovered from a jolt on Monday when worries about the Omicron variant pushed investors to safe-haven assets like the greenback.
The risk of needing to stay in the hospital for patients with the new variant is 40% to 45% lower than for patients with the Delta variant, according to research by London’s Imperial College published on Wednesday.
In currency markets, the dollar index neared a one-week low, although most analysts expect it to strengthen in the weeks ahead as the U.S. Federal Reserve begins to tighten monetary policy faster than other central banks.
The dollar’s recent losses have been fairly broad-based; the euro has gained for the last four sessions, and the Australian dollar – often seen as proxy for risk appetite – is up 1.2% on the week.
Oil prices were broadly stable on Thursday as signs the worst effects of the Omicron variant might be containable were countered by new travel curbs amid surging COVID-19 case numbers.
U.S. crude recently rose 0.14% to $72.86 per barrel and Brent was at $75.44, up 0.2% on the day.
Spot gold added 0.1% to $1,805.31 an ounce.
(Reporting by Jessica DiNapoli in New York; additional reporting by Alun John and Lawrence White; Editing by Kenneth Maxwell, Ana Nicolaci da Costa, Pravin Char and Jonathan Oatis)