Dow jumps 500 points as stocks recover some Omicron sell-off losses

0
13

[ad_1]

The Dow Jones Industrial Average jumped more than 500 points at one point on Wednesday, with stocks that were hit hard by the emergence of the Omicron variant of the coronavirus recovering some of their losses for the week.

The Dow pared some of those gains shortly before noon after South Africa reported nearly twice as many new COVID-19 cases on Wednesday compared with Tuesday. The index was last seen about 400 points, or 1.1 percent, higher.

The S&P 500 and Nasdaq were up 1.5 percent and 1.2 percent, respectively.

The gains come after Tuesday’s sell-off as investors fretted over fears that COVID-19’s new Omicron variant could wreak fresh havoc on the world economy.

Federal Reserve Chairman Jerome Powell helped accelerate the losses on Tuesday after he warned that the central bank will still likely discuss hastening the tapering of its bond-buying program at its December meeting, despite new threats posed by the Omicron variant.

“At this point, the economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases … perhaps a few months sooner,” Powell told lawmakers Tuesday. “I expect that we will discuss that at our upcoming meeting.”

The Dow Jones jumped more than 500 points at one point on December 1, 2021 with stocks that were hit hard by the emergence of the Omicron variant.
The Dow Jones jumped more than 500 points at one point on December 1, 2021.
AP Photo/Richard Drew

The Omicron variant has been found in 20 countries but not yet in the US, White House chief medical adviser Anthony Fauci said Tuesday.

The emergence of the new variant has spurred countries around the world to implement travel restrictions once again — though public health experts are split on the effectiveness of such measures and whether it’s the right course of action.

Little remains known about the new variant, with some warning that it’s likely to reduce the effectiveness of the currently available vaccines and medications while others point to signs that it may lead to less severe sickness while being more transmissible.

A trader works on the floor of the New York Stock Exchange at the opening bell.
A trader works on the floor of the New York Stock Exchange at the opening bell.
EPA/JUSTIN LANE

The uncertainty has thrown investors into a frenzy as they try to figure out how to position themselves on the current state of the pandemic.

Richard Saperstein, chief investment officer at Treasury Partners, said stock prices “will likely continue to deflate until there is more certainty about vaccine efficacy against the new variant and the vaccine’s overall ability to be quickly updated to address future mutations.”

“Market volatility will be elevated due to the uncertainty of the efficacy of vaccines and their ability to be manipulated to address disease mutations. A successful outcome of vaccine manipulation will be a significant milestone for further stock market gains.”

Uncertainty around the new Omicron variant has thrown investors into a frenzy as they try to figure out how to position themselves on the current state of the pandemic.
Uncertainty around the new Omicron variant has thrown investors into a frenzy as they try to figure out how to position themselves on the current state of the pandemic.
AP Photo/Richard Drew

Ryan Detrick, chief market strategist for LPL Financial, added that Powell’s remarks from yesterday about hastening the winding down of the bond-buying program “added gasoline to the fire” of the sell-off.

Though Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said he believes “the underlying fundamentals of the economy and an upcoming robust vaccine response to the new threats will allow the market to rally back from the near-term selloff that we are currently experiencing.”

[ad_2]

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here