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Wall Street Jumps at Open on Omicron Optimism; Dow up 240 Pts

Stock MarketsDec 01, 2021 23:20
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets rose sharply at the open on Wednesday, amid hopes that the new Omicron variant of Covid-19 will not be as economically disruptive as first feared. 

Another strong set of data from the labor market also encouraged participants that the U.S. economy is plenty strong enough to cope with the withdrawal of Federal Reserve stimulus - even if that means earlier interest rate hikes too.

By 9:40 AM ET (1440 GMT), the Dow Jones Industrial Average was up 240 points, or 0.7%, at 34,723 points. The S&P 500 was up 1.0% and the Nasdaq Composite was up 0.2%.  None of the indices, however, managed to recoup all their losses of Tuesday. 

Earlier, private payrolls processor ADP said that the U.S. private sector added another 534,000 jobs through the middle of November, down from 570,000 a month earlier, but still above forecasts and the second-largest monthly gain in six months. The Institute of Supply Management's manufacturing PMI for November, meanwhile, ticked up to 61.1 from 60.8 the previous month, while the red-hot prices paid component of the index fell a little to 82.4 from 85.7.

Sentiment was helped by increasing signs that the new Omicron variant of Covid-19 will not put any unbearable strain on public health systems, despite appearing to be more highly transmissible than the Delta variant that has dominated this year. Europe's Center for Disease Control said there were 59 identified cases of Omicron-variant Covid across the EU, all of them either mild or asymptomatic. That corroborated early findings from South Africa - the first country to identify the strain - where health experts have also said that there had been no clear pick up in serious infection rates.

Software companies were in focus after a handful of companies reported after the close on Tuesday. Zscaler (NASDAQ:ZS) stock rose 2.0% after its sales through October came in well above expectations, although it guided for a modest sequential decline in billings in the coming quarter. Going in the other direction, Salesforce (NYSE:CRM) stock fell 7.5% to its lowest in over two months after its guidance came in materially below expectations, the result of intense competition in the Cloud space from the likes of Microsoft (NASDAQ:MSFT) and Amazon Web Services. Amazon (NASDAQ:AMZN) stock rose 0.8% after a joint announcement saying that AWS will deepen its strategic partnership with Facebook owner Meta Platforms (NASDAQ:FB) as it develops its suite of Cloud-based services.

Elsewhere, Twitter (NYSE:TWTR) stock rose another 5.4% as investors reassessed its outlook under new management in the wake of founder Jack Dorsey's departure as CEO. Match Group (NASDAQ:MTCH) stock, supported in any case by the broader return of risk appetite, rose 3.2% after the dating site operator agreed to pay $440 million to settle a lawsuit by executives claiming they were unfairly denied the opportunity to exercise and sell their stock options.

The morning's big underperformers were - unsurprisingly - vacccine stocks. Moderna (NASDAQ:MRNA) stock lost 4.9%, while BioNTech (NASDAQ:BNTX) stock fell 1.6% and Pfizer (NYSE:PFE) stock fell 0.8%.

Wall Street Jumps at Open on Omicron Optimism; Dow up 240 Pts
 

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