U.S. stocks traded sharply higherThursday morning, in what has become an increasingly volatile market resulting in uncertainty over the spread of coronavirus and a fuzzy path for monetary policy and the U.S. economy.
The Dow Jones Industrial Average
rose 470 points, or 1.4%, to around 34,493.
The S&P 500 index
advanced 1.1%, or 49 points, at 4,562.
The Nasdaq Composite Index
picked up 0.8%, or 116 points, to reach 15,370.
In an incredibly volatile session on Wednesday, the Dow ended 1.3%, or 462 points, lower to 34022.04, as the Nasdaq Composite slumped 1.8%, or 284 points, to 15254.05. The S&P 500 fell 1.2% to 4513.04, and the small-cap Russell 2000
slumped 2.3%, or 51 points, to 2147.42.
What’s driving markets
Markets were staging a fresh attempt at recovering from omicron-inspired declines, with recent selling deteriorating upward trend lines for the main stock benchmarks.
Thursday’s trading followed an ugly Wednesday that was precipitated by confirmation of the first U.S. omicron variant case, which sent the S&P 500 below its 50-day moving average for the first time since Oct. 13.
“It seems that investors’ main concern remains the uncertainty surrounding the omicron coronavirus variant and the implications any new restrictions could have to the global economy,” said Charalambos Pissouros, head of research at JFD Group.
It also came as Fed Chair Jerome Powell, for a second day, brought up the prospect of a quicker taper, which in turn sets the stage for more, and faster, interest-rate hikes.
“It is not about Covid; it is about the Fed and what they plan to do. This selling will grow much worse; this will become about how much pain the Fed can endure,” said Michael Kramer, chief executive of Mott Capital Management.
What’s clear is that once tranquil markets are now increasingly volatile. Analysts at Bespoke Investment Group found 17 instances since 1928 in which there were three drops of at least 1%, and one gain of at least 1%, in the four days preceding a close below the 50-day average. The median gain in a year’s time was 16%, though there were drops of 40% in 2007 and 23% in 1934.
In economic reports, data released on Thursday showed that initial jobless claims climbed 28,000 to 222,000 during Thanksgiving week.
On deck later Thursday were appearances by Fed Gov. Randal Quarles, who is set to speak at 11 a.m. ET and Fed presidents Mary Daly and Tom Barkin, who are set to speak about the labor market about a half-hour after Quarles.
Which companies are in focus?
- Norfolk Southern Corp. NSC said Thursday that Chief Executive James Squires will retire on May 1, 2022, after about seven years in the role. Its shares were up 1.5%.
- Kroger Co. KR stock jumped over 7% in Thursday trading after the grocer reported third-quarter earnings that beat expectations.
Shares of Boeing Co. BA bounced 3.6% Thursday, enough to pace the Dow early gainers.
- Dollar General Corp. DG shares fell 3.2% in Thursday premarket trading after the discount retailer reported a third-quarter profit decline.
- Chesapeake Energy Corp. CHK shares rose over 5% after the energy producer announced Thursday plans to repurchase up to $1 billion worth of its common stock and/or warrants to buy back stock over the next two years.
How are other assets faring?
Gold futures GC00 for February delivery GCG22 were down 0.9% to trade at $1,768.30 an ounce.
January West Texas Intermediate crude CLF22 fell 99 cents, or 1.5%, to $64.66 a barrel on the New York Mercantile Exchange, after the Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, decided to rollover their current policy and raise monthly overall production by 400,000 barrels a day in January.
The ICE U.S. Dollar Index DXY, -0.12%, a measure of the currency against a half-dozen other monetary units, was down 0.2% at 95.864.
The 10-year Treasury note yields TMUBMUSD10Y trade around was at 1.421%, down from 1.433% at 3 p.m. Eastern on Wednesday. Prices for Treasurys fall as yields rise.
The Stoxx Europe 600 SXXP traded 1.2% lower and London’s FTSE 100 UKX declined 0.5%.