Stocks Rally For A Second Day—Dow Gains 500 Points—As Investors Shake Off Omicron Fears

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Top Line

The stock market rallied on Tuesday, extending a strong rebound from last week’s rough patch, as concerns about the Omicron version continued to ease and investors bet on stocks tied to the economic recovery.

important facts

The Dow Jones Industrial Average rose 1.4%, nearly 500 points, while the S&P 500 and Nasdaq Composite rose 2.1%.

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The stock added to Monday’s gains, continuing a rebound from last week’s selloff, when the market was volatile following the emergence of the new Covid Omicron variant.

Stocks of companies driven by the economic recovery—including airlines, cruises, casinos and other travel-related stocks—continued to drive the stock market higher.

The nation’s top epidemiologist Dr. Anthony Fauci said on Sunday that preliminary data was “encouraging”, amid reports that investors now appear to be less nervous about the Omicron version, which has milder symptoms than it feared.

Tech stocks staged a comeback rally on Tuesday, despite struggling in recent weeks due to Covid-related selling, while shares of chipmakers such as Intel and Nvidia also posted big gains, rising 3% and 8%, respectively. did.

Shares of big tech giants including Microsoft, Alphabet, Amazon and Apple rose nearly 2% or more.

Main background:

Shares have now posted solid gains for two consecutive days. The Dow and the S&P rose 1.9% and 1.2%, respectively, on Monday as investors brushed off concerns about the Omicron version. While recent gains reverse last week’s selloff, investors will now be watching the Federal Reserve closely, which is expected to accelerate the tapering of its pandemic bond-buying program at its December meeting next week. Markets now also expect the central bank to raise interest rates as soon as next May to cope with rising inflation, which Fed Chairman Jerome Powell recently said could happen “well into the next year”. .

Important Quote:

Adam Crisafuli, founder of Vital Knowledge, says, “Omicron reality is proving to be much less harsh than feared, but we would caution investors against waving the completely obvious flag too aggressively (much still not known). “We are also encouraged by the reset of Fed expectations,” he said, although “the market does not appreciate the extent to which monetary policy, which has slowed the tech-led ramp up for years.” done, changing.”

Shocking fact:

Despite the market’s worst day of the year on Friday, November 26, investors collectively took the plunge last week, with the Dow down 950 points, according to recent data from Bank of America. The firm said total stock inflows from clients totaled $6.7 billion last week — the highest intake since 2017.

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