Daily market review

United States

Equities were mixed with a negative cast as the year-end rally ran out of steam. The Dow Jones industrial average firmed 0.3 percent, the S&P 500 declined 0.1 percent, and the NASDAQ declined 0.6 percent.

Markets lacked energy to extend the year-end advance that lifted risk assets Monday, and the S&P 500 retreated after setting Monday's record high close.

Travel & entertainment stocks recovered after the Centers for Disease Control shortened the recommended quarantine for people who have Covid-19 but no symptoms. Investors generally see governments taking a less aggressive approach to restrictions, while the Omicron variant appears less deadly than Delta or other previous variants.

Technology stocks, the leaders Monday, retreated Tuesday, along with health care. Apple was down 0.6 percent, and Microsoft off 0.4 percent. Value stocks outperformed, with financials, consumer staples, and industrials leading. Airlines benefited from hopeful views on Omicron, with American Airlines up 2.0 percent. Consumer staples got a boost from the stay-at-home trade, with Campbell's Soup up 2.8 percent. Disney, up 1.6 percent, was another winner in the stay-at home trade to boost the Dow industrials.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 34 cents to US$79.04 while spot gold fell US$6.08 to US$1,806.39. The US dollar fell vs. most major currencies but rose vs. the yen. Yields on the US Treasury 30-year bond rose 2 basis points at 1.90 percent, and the 10-year note was flat at 1.48 percent.


Equities edged up in thin trading with investors betting the global economy can weather the current Omicron wave. The Europe-wide STOXX 600 rose 0.6 percent, the German DAX gained 0.8 percent, the French CAC rose 0.6 percent, and UK markets remained on holiday.

Gains were nearly across the board with industrials, health care, and utilities outperforming. Travel & leisure lagged as many nations imposed limited restrictions, and more restrictions were expected in January. Risk sentiment drew support from a South African report saying infection with Omicron can boost immunity to Delta and other strains. Investors also noted US-Russia talks are scheduled starting Jan. 10 aimed at cooling tensions over Ukraine.

Among companies in focus, Bravida Holding rose 1.9 percent on news it will buy a controlling stake in Viva Energi, the solar panel maker. BASF rose 0.3 percent after announcing it will sell one of its US business units.

Asia Pacific

Equities advanced with a boost from gains on Wall Street and as concerns about economic fallout from the Omicron variant eased even as case counts mounted. Regional governments outside China appear to be holding off on widening antivirus restrictions.

Japanese equities rebounded from Monday's losses with the Nikkei 225 and the Topix both up 1.4 percent. Tech shares including chipmakers led the way higher after tech/growth stocks rose in the US hours. Exporters got a lift from the weaker yen. Unexpectedly strong industrial production figures added to better sentiment.

China's CSI 300 index gained 0.7 percent and the Shanghai composite index firmed 0.4 percent with strength centered in cyclicals and property stocks as China Evergrande said it had stepped up its pace of delivering new property units. Hong Kong's Hang Seng index edged up 0.2 percent. Hong Kong tech stocks were depressed by fallout from new Chinese rules limiting foreign listings and foreign ownership.

South Korea's KOSPI rose 0.7 percent and Taiwan's Taiex advanced 0.8 percent as technology stocks extended the week's gains.

Australia and New Zealand markets remained on holiday.

In economic news, Japan's industrial production posted the second straight monthly rise in November, at a rate higher than forecast, as supply chain disruptions eased further to help carmakers and other firms recover some of their lost output. Industrial production jumped a seasonally adjusted 7.2 percent from the previous month in November, coming in stronger than the median economist forecast of a 4.8 percent rise and marking the largest gain under the current 2015 base year.

Looking ahead*

In Asia/Pacific, no major economic reports are scheduled for release. In Europe, the Eurozone M3 report is scheduled. In North America, US international trade in goods, US retail inventories, US wholesale inventories, and US pending home sales reports are on tap.

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