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Wall Street stocks climb as investors look past Covid curbs


Global stocks climbed for the second consecutive session on Wednesday, reversing recent declines prompted by concerns about the spread of the Omicron coronavirus variant.

The blue-chip S&P 500 benchmark closed 1 per cent higher, led by consumer stocks, with every sector within the index in positive territory. The tech-heavy Nasdaq Composite climbed 1.2 per cent.

Equity markets have swung back and forth in recent days as investors react to the rapid spread of Omicron and an evolving monetary policy environment, with thin trading volumes ahead of year-end exaggerating the moves.

Core government debt advanced alongside the uptick in Wall Street stocks, taking the yield on the 10-year US Treasury note down 0.01 percentage points to 1.45 per cent.

Line chart of Week-to-date performance (%) showing US stocks claw back recent losses after two-day rally

Wednesday’s gains in the US followed a similarly positive day in European markets, and the FTSE All-World Index rose 1 per cent, wiping out the losses suffered in volatile trading on Friday and Monday.

The Europe-wide Stoxx 600 index rose 0.9 per cent while Frankfurt’s Xetra Dax climbed 0.9 per cent, with investors looking past the introduction of tighter Covid-19 restrictions in Germany.

Despite falling infection rates in the country, Olaf Scholz, Germany’s new chancellor, announced this week that private gatherings among the vaccinated would be limited to 10 people from December 28, with even tighter rules for those who had not yet been jabbed.

Boris Johnson, UK prime minister, meanwhile ruled out imposing new restrictions in England before Christmas, but warned “further measures” could be necessary the following week.

The Office for National Statistics revised down its estimate for UK economic growth on Wednesday to 1.1 per cent, from 1.3 per cent in the third quarter of the year — the period before the new variant hit.

London’s FTSE 100 climbed 0.6 per cent, leaving the benchmark index up 4 per cent so far for December. The UK’s mid-cap FTSE 250 index, which is more exposed to domestic companies, rose even further, ending the day up 1.1 per cent.

Joe Biden, US president, said in an address this week that vaccinated Americans “should feel comfortable celebrating Christmas and the holidays” as planned. Cities, including Chicago, New York and Los Angeles, have instituted vaccine mandates in bars, restaurants and most public indoor settings.

The US on Tuesday reported more than 1m new Covid-19 cases in a weekly period for the first time since September.

In Asia, Hong Kong’s Hang Seng closed up 0.6 per cent and Tokyo’s Nikkei 225 Average added 0.2 per cent.

Oil moved higher too, with global benchmark Brent crude rising 1.8 per cent to $75.29 a barrel — a three-session high.



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