SPY456.49-8.23 -1.77%
DIA353.85-5.29 -1.47%
IXIC14,506.90-386.86 -2.60%

US STOCKS-Dow eyes record highs amid waning Omicron worries

US STOCKS-Dow eyes record highs amid waning Omicron worries

reuters.com · 12/29/2021 14:44
US STOCKS-Dow eyes record highs amid waning Omicron worries

For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.

Dow nears an all-time high

Tesla CEO Musk nears 10% stake sale pledge

Victoria's Secret shares up on stock buyback plan

Indexes: Dow up 0.3%, S&P 500 up 0.16%, Nasdaq down 0.04%

Adds comment, details; updates prices; changes byline

By Echo Wang

- The Dow edged towards an all-time high in afternoon trading on Wednesday, on a boost from retailers including Walgreens and Nike and investors shrugged off concerns of the Omicron variant of the COVID-19 coronavirus.

The Dow has now risen six straight trading days, marking the longest streak of gains since a seven-session run from March 5 to March 15 this year.

Walgreens Boots Alliance WBA.O and Nike Inc NKE.N advanced 1.29% and 1.36%, respectively, against the backdrop of recent reports suggesting holiday sales were strong for U.S. retailers. nL1N2TB07T

Data on Wednesday showed the U.S. trade deficit in goods ballooned to the widest ever in November as imports of consumer goods shot to a record, as the coronavirus pandemic has limited spending by Americans on services. nL1N2TE0XM

Some early studies pointing to a reduced risk of hospitalization in Omicron cases have eased some investors concerns over the travel disruptions and powered the S&P 500 to record highs this week.

"The market started to recognize that the Omicron variant was in a strange way good news, because it will burn itself out more rapidly because it's easily transmissible, but it's less likely to overwhelm hospitals," said Jay Hatfield, founder and chief executive of Infrastructure Capital Management in New York. Still, he said Omicron arguably is going to be a headwind for at least the next month.

Meanwhile, the S&P 1500 airlines index .SPCOMAIR shed 0.83%. Delta Air Lines DAL.N and Alaska Air Group ALK.N canceled hundreds of flights again on Tuesday as the daily tally of infections in the United States surged. nL4N2TD1UMnL8N2TE11Q

Eight of the 11 major S&P sector indexes advanced. The communication service index .SPLRCL slipped 0.62% as the biggest decliner.

Typically, the final five trading days of the year and the first two of the subsequent year are seasonally strong for U.S. stocks, known as the "Santa Claus Rally." However, market participants warned against reading too much into daily moves as the holiday season tends to record some of the lowest volume turnovers that can cause exaggerated price action.

At 2:38 PM ET, the Dow Jones Industrial Average .DJI rose 109.75 points, or 0.3%, to 36,507.96, the S&P 500 .SPX gained 7.72 points, or 0.16%, to 4,794.07 and the Nasdaq Composite .IXIC dropped 5.87 points, or 0.04%, to 15,775.85.

The S&P 500 dipped on Tuesday in the lowest trading volume session of 2021, snapping a four-day winning streak. nL8N2TE11Q

As 2021 draws to a close, the main U.S. stock indexes are on pace for their third straight year of stunning annual returns, boosted by historic fiscal and monetary stimulus. The S&P 500 is looking at its strongest three-year performance since 1999.

The focus next year will shift to the U.S. Federal Reserve's path of interest rate hikes amid a surge in prices caused by supply chain bottlenecks and a strong economic rebound.

Among other stocks, shares of Victoria’s Secret & Co VSCO.N rose more than 13% after the intimate apparel retailer announced a $250 million accelerated share repurchase program. The retailer also said they had strong sales over the holidays.

Tesla's TSLA.O CEO Elon Musk exercised all of his options expiring next year, signaling an end to his stock sales. Its shares dropped 0.37% but were still on course to end about 54% for the year. nL1N2TE04B

Advancing issues outnumbered declining ones on the NYSE by a 1.08-to-1 ratio; on Nasdaq, a 1.42-to-1 ratio favored decliners.

The S&P 500 posted 67 new 52-week highs and no new lows; the Nasdaq Composite recorded 65 new highs and 344 new lows.

(Reporting by Echo Wang in Taos, New Mexico; Additional reporting by Medha Singh and Anisha Sircar in Bengaluru; editing by Uttaresh.V and Diane Craft)

((E.Wang@thomsonreuters.com; +1 9172873971; Reuters Messaging: E.Wang@thomsonreuters.com@reuters.net))