As the market reassesss the risks of Omicron, travel stocks lead Wall Street higher

Wall Street stocks rose on Monday, led by travel stocks due to market concerns Omi Kron The coronavirus variant will cause the new lockdown to relax.

The S&P 500 index rose 1.2% on Monday and closed down 0.8% on Friday. Travel-related stocks rose strongly, with Norwegian Cruise Line, United Airlines, Royal Caribbean Cruises and Carnival all rising more than 8%.

Jack Ablin, chief investment officer of Cresset Wealth Advisors, said: “It looks like investors are worried about interest rates, but they are not worried about Omicron.” “I think the market has concluded that we will not lock ourselves in because of this.”

On Sunday, Anthony Fauci, the top health official in the United States Call The early signals about the severity of Omicron were “encouraging,” telling the news channel CNN that “we are certain that there will be a certain degree or even a considerable degree of protection” and booster jabs.

While scientists are waiting for conclusive data on this variant, the market may fluctuate due to new headlines about Omicron.

The technology-focused Nasdaq Composite Index closed up 0.9% on Monday. The narrowed gains continued the trend of the past two weeks, in which the Nasdaq index lags behind the S&P 500 index.

As policymakers at the U.S. Central Bank expressed their satisfaction with the more aggressive tightening policies previously imagined, investors have withdrawn from faster-growing technology stocks. Technology stocks are particularly sensitive to changes in interest rates because the industry’s valuation depends on distant future profits.

Tesla’s stock price fell more than 20% on Monday from the record high set last month, and then regained some of its lost ground.

In the Treasury bond market, cross-term bond yields have risen, and longer-term bonds have risen faster than short-term bonds. The rise in short-term yields shows that investors are increasingly agreeing that the Fed will raise interest rates.

Fed Chairman Jay Powell He expressed support Faster reduction of the central bank’s $120 billion monthly bond purchase program, which reduced borrowing costs and boosted the stock market during the pandemic. The acceleration of the end shows that the Fed is open to raising interest rates earlier than originally expected.

Although rising yields on longer-term Treasury bonds usually indicate that investors expect higher economic growth or inflation in the US, these expectations seem to have eased because 10-year and 30-year yields are still close to the low end of the recent trading range.

As debt prices fell, the benchmark 10-year US Treasury bond yield rose by 0.09 percentage points to 1.43%. Before the World Health Organization announced Omicron as a worrying variant, and before expectations of faster monetary policy tightening prevailed, this debt yield traded above 1.65% at the end of November.

US employment data released on Friday showed that US employers added 210,000 workers last month, less than half of what economists surveyed by Reuters expected. The data also showed that the unemployment rate dropped sharply to 4.2%.

The Stoxx Europe 600 index closed up 1.3%. The London FTSE 100 Index rose by about 1.5%, with commodity producers and mining companies heavily weighted. UK-listed travel stocks also closed higher, with shares of British Airways owner IAG rising 8.1%.

In Asian stock markets, Hong Kong’s Hang Seng Index fell 1.8%, and the stock prices of large Chinese technology companies such as Alibaba and Tencent fell sharply. The Tokyo Topix Index closed down 0.5%.

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