Stocks bounce back after variant news

Markets post gains following drops Friday due to omicron

Wall Street steadied itself Monday after last week’s stock market slide caused by the newest coronavirus variant, with investors now waiting for more clues about just how much damage it may do to the economy.

The S&P 500 rose 1.3 percent to recover more than half of its drop from Friday, which was its worst since February. Bond yields and crude oil also recovered chunks of what they lost in traders’ knee-jerk reaction to run toward safety and away from risky investments.

With vaccines in hand — and with the benefit of a weekend to mull whether Friday’s sharp market moves were overdone — analysts said the world may be in better position to weather this newest potential wave. Plus, Friday’s tumble for markets may have been exacerbated by many traders taking the day off following Thanksgiving.

But while the market steadied itself, uneasiness still hangs over it due to the discovery of the variant now known as omicron.

The variant appears to spread more easily, and countries around the world have put up barriers to travel in hopes of stemming it.

Still to be seen is how effective vaccines currently available are for the variant, and how long it may take to develop new omicron-specific vaccines.

“There are still more questions than answers regarding the new variant,” said Ryan Detrick, chief market strategist for LPL Financial.

The Dow Jones Industrial Average wavered between a loss of 3 points and a gain of 388 points through the day. It ended with a gain of 236.60 points, or 0.7 percent, at 35,135.94.

The most powerful lift for stocks came from those that have been able to grow strongly almost regardless of the economy’s strength or pandemic’s pall.

Gains for five big tech-oriented stocks — Microsoft, Tesla, Apple, Amazon and Nvidia — alone accounted for more than a third of the S&P 500’s rise.

The gains for tech-oriented stocks also helped to drive the Nasdaq composite up 1.9 percent.

All told, the S&P 500 rose 60.65 points to 4,655.27, while the Nasdaq added 291.18 points to 15,782.83.

The Russell 2000 index of small companies was headed for its own rebound after climbing 1.6 percent in the early going, but its gains faded by late afternoon. The index slipped 3.96 points, or 0.2 percent, to 2,241.98.