Asian stock markets rise after Wall St rebound
Stocks closed broadly higher on Wall Street on Wednesday, adding to market gains this week ahead of the Christmas break.
The S&P 500 rose 1% after recovering from an early decline. The other indices also recovered after slipping into the red early on. The Dow Jones Industrial Average rose 1.1% and the Nasdaq closed up 1.2%. The Russell 2000, a measure of small business stocks, rose 0.9%.
All major US indices are still on track for weekly gains after several turbulent days where stocks rebounded between big losses and solid gains.
“We had strength yesterday and today, so markets are generally positive this week after some good pressure last week,” said Terry Sandven, chief equity strategist at US Bank Wealth Management.
The S&P 500 gained 47.33 points to 4,696.56. The index is now less than 0.4% of the all-time high it reached on December 10.
The Dow Jones gained 261.19 points to 35,753.89, while the Nasdaq rose 180.81 points to 15,521.89. The Russell 2000 gained 18.96 points to 2,221.90.
The latest increase in coronavirus cases due to the omicron variant has weighed on markets, along with concerns about rising inflation and its impact on economic growth.
The Commerce Department said on Wednesday that the US economy grew at a rate of 2.3% in the third quarter, slightly better than previously thought. But the prospects of a strong rebound going forward are clouded by the rapid spread of the latest variant of the coronavirus.
“The market is a little uncertain about this (omicron), but seems somewhat convinced it’s not going to turn into another foreclosure,” said Scott Wren, senior global markets strategist at Wells Fargo Investment Institute.
Even so, uncertainty about the impact of the latest variant on the economy is likely to cause more market fluctuations.
“Clearly, the pace of economic recovery is being held hostage by omicron, resulting in increased volatility,” Sandven said. “According to our metric, volatility is likely to be more the norm than the exception, and for good reason.”
Governments in Asia and Europe have tightened travel controls or pushed back plans to ease restrictions already in place. In the United States, President Joe Biden announced on Tuesday that the government would provide rapid test kits and increase vaccination efforts, but gave no indication of plans for restrictions that could disrupt the economy.
Investors have also been busy moving money between sectors as the end of the year nears, and they are bracing for higher interest rates in 2022. The Federal Reserve has said it will step up. the process of reducing its bond purchases that have helped keep interest rates low and that opens the door to central bank rate hikes in 2022.
Nearly 80% of S&P 500 companies rose on Wednesday. Retailers and other businesses that rely on consumer spending accounted for a significant portion of the gains. They increased following the encouraging report on consumer confidence.
Tesla jumped 7.5% for the biggest gain in the S&P 500 after CEO Elon Musk reportedly said he sold enough shares to meet his goal of selling 10% of his stake in the electric vehicle maker.
Technology and healthcare stocks have also helped lift the market. Microsoft rose 1.8% and Abbott Laboratories rose 2.8%.
Traders increased their shares in cruise lines, hotel operators and other travel-related stocks. Carnival rose 3.5%, Marriott by 2.7% and Expedia Group by 2.9%.
Energy futures rose as the price of US crude oil rose 2.3%.
Bond yields have mostly fallen. The 10-year Treasury yield fell to 1.46% from 1.48% on Tuesday night.
The indices closed mostly higher in Europe and Asia.
US markets will be closed on Friday for Christmas.
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