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Tuesday, August 9, 2022

Dow climbs 646 points as investors see lower threat from Omicron variant

  • The Dow Jones Industrial Average tacked on more than 600 points Monday in a rebound from last week’s volatility. 
  • Investors appeared to set aside worries about the Omicron strain of coronavirus. 
  • Reports over the weekend indicate the latest virus variant is producing mild symptoms in patients. 

US stocks ended Monday’s session sharply higher, shifting into recovery mode as investors appeared to embrace reports that the most recent variant of coronavirus is so far showing to provoke less severe symptoms than previous strains.

Wall Street’s major benchmarks gathered upward momentum during the session, leaving the Dow Jones Industrial Average up by more than 600 points following Friday’s selloff. The Nasdaq Composite swung out of negative territory on Monday. 

The first session of the week got underway with reports from South Africa and Japan that Omicron patients are largely experiencing mild symptoms, with comparisons being made to the original COVID-19 and Delta strains. Omicron was recently first identified in South Africa.

The “incremental news on Omicron variant is skewing positive, and regardless of its ultimate severity/impact, the market recognizes that renewed lockdowns and aggressive restrictions are highly unlikely,” Ross Mayfield, an investment strategy analyst at Baird, told Insider in a note. “Plenty still to parse out and need additional data, but cyclicals and virus-sensitive stocks responding well so far.”

Here’s where US indexes stood at 4:00 p.m. on Monday:   

“Economic growth and momentum in Q4 have been surprisingly robust post-Delta surge,” Mayfield added. “This bodes well for nominal GDP growth and corporate earnings being able to keep up with lofty expectations. Should supply pressures moderate (and we see signs they are beginning to), the outlook for equities heading in 2022 looks quite strong.”

Shares of Lucid Motors fell after the luxury electric vehicle maker revealed it’s been subpoenaed by the Securities and Exchange Commission. 

ConstitutionDAO, the group that tried and failed to win a copy of the US Constitution at auction, saw its People Token spike since disbanding

Oil prices jumped, with West Texas Intermediate crude up by 5.1% to $69.64 per barrel. Brent, oil’s international benchmark, climbed about 5% to $73.35 per barrel. 

Gold fell 0.21% to $1,777.56 per ounce. 

Bitcoin slipped 0.3% to $49,228.52 following its crash over the weekend alongside other cryptocurrencies. 

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