Equities continued their recent advance on reports suggesting lower hospitalization rates from the Omicron variant and good prospects for vaccines and treatments. The Dow Jones industrial average and the S&P 500 both rose 0.6 percent, with the S&P setting a new record high close. The NASDAQ gained 0.9 percent.
Easing of some coronavirus concerns left markets to focus on typical seasonal demand for stocks, but conditions were thin headed into the holiday weekend. Value stocks outperformed growth, with most sectors higher. Stay-at-home stocks and defensives lagged, including consumer staples, health care, utilities, and real estate investment trusts. Bond yields were notably higher as investors rotated back into risk assets.
Best performing were industrials, paced by transportation stocks, plus materials, with chemicals leading the way. Rising yields lifted banks. Energy perked up with the supermajors leading. Consumer discretionary lagged on weakness in homebuilders and cruise lines.
Among companies in focus, FedEx rose 1.6 percent and Tesla rose 5.8 percent on positive analyst commentary. Nikola, the electric truck maker, rallied 18 percent after delivering its first vehicle. Scientific Games, the gaming services company, rose 9.0 percent after withdrawing from a proposed investment in rival SciPlay, which fell 13 percent. Crox, the shoe maker, fell 12 percent on news it will buy Heydude, another shoe brand.
These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.52 to US$76.93 while spot gold gained US$4.87 to US$1,808.83. The US dollar fell vs. most major currencies but rose vs. the yen. Yields on the US Treasury 30-year bond rose 4 basis points at 1.91 percent, and the 10-year note rose 2 basis points to 1.50 percent.
New reports showing infections from the Omicron variant to be milder than those from the Delta variant boosted equities even as case counts surged and limited restrictions were imposed. The Europe-wide STOXX 600 and the German DAX both rose 1.0 percent, the French CAC gained 0.8 percent, and the UK FTSE 100 rose 0.4 percent.
Among sectors, best were travel & leisure, banks, construction, industrials, autos, insurance, and technology. Lagging were health care, utilities, personal and household goods, and real estate.
Among companies in focus, Flutter Entertainment, the bookmaker, rose 2.8 percent on news it will buy Sisal, an online gambling company. Continental, the auto parts giant, rose 2.5 percent on improved profit guidance. Prosus, the internet conglomerate, rose 4.6 percent on news it will get a big payout from Tencent after the latter sold its stake in JD.com.
Strength on Wall Street and increasing hopes that the fast-spreading Omicron variant won't derail the global recovery bolstered equities.
Japanese equities tracked Wall Street's rise with the Nikkei 225 up 0.8 percent and the Topix gained 0.9 percent. Reports suggesting the government is not planning tighter anti-Covid restrictions supported market sentiment. Commodities stocks were among the best performers in relatively quiet trading while health care lagged.
China's CSI 300 index rose 0.7 percent and the Shanghai composite index gained 0.6 percent. Consumer staples fared best while health care underperformed. The Hong Kong Hang Seng index rose 0.4 percent, with mainland energy stocks leading while tech lagged. Among companies in focus, Tencent rose 4.2 percent and JD.com fell 7.0 percent after Tencent said it would divest its holdings of JD.com.
South Korea's KOSPI rose 0.5 percent and Taiwan's Taiex gained 0.7 percent as they tracked Wall Street's tech stock rally.
Australia's All Ordinaries index rose 0.3 percent in quiet trading with utilities and industrials leading while consumer staples and telecoms lagged. Markets started higher on carry-over strength from US markets and expectations that anti-Covid lockdowns are unlikely, but gains were limited by caution over rising Covid infections in Australia and mask mandates and recommendations to work from home.