US stocks edge higher, regaining footing after slump Friday

News of the new omicron variant of Covid-19 threatened the stock market on Friday

Ap Business Writer
Monday 29 November 2021 17:35
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<p>Stock indexes are edging higher on Wall Street </p>

Stock indexes are edging higher on Wall Street

Stock indexes are edging higher on Wall Street Monday as markets regain their footing following a big stumble on Friday on worries about the spread of the new variant of the coronavirus.

The S&P 500 rose 0.8 percent as of 10.49 am Eastern. The benchmark index slumped 2.3 percent on Friday for its worst day since February. The Dow Jones Industrial Average gave up most of an early gain and was up just 17 points, less than 0.1 percent, at 34,918. The Nasdaq rose 1.2 percent. Small-company stocks gave up an early gain and moved lower.

Technology companies made some of the biggest gains. Apple rose 1.4 percent and Microsoft rose 2.5 percent. Retailers and other companies that rely on consumer spending also made solid gains. Amazon rose 1.7 percent and Nike rose 1.2 percent.

Airlines stocks remained lower as countries re-imposed travel restrictions. American Airlines fell 1.5 percent and Alaska Air lost 1.1 percent. Stocks that had benefited from people staying at home, which surged on Friday, fell back on Monday. Home exercise equipment maker Peloton gave up 6.1 percent and Zoom Video Communications lost 3.9 percent.

US crude oil prices jumped 3.1 percent, recovering partly following a plunge of more than 13 percent on Friday.

Like stocks, the bond market and other corners of Wall Street also steadied themselves following Friday's knee-jerk reaction to run toward safety and away from risky investments. With vaccines in hand, the world may be in better position to weather this newest potential wave. Plus, Friday's market moves may have been exacerbated by many professional traders taking the day off following Thanksgiving.

"So as the initial shock wears off a bit, traders could be eyeing opportunities and coming to terms with the possibility of some short-term volatility associated with a potential new wave," Chris Larkin, managing director of trading at E-Trade Financial, said in a statement.

The yield on the 10-year Treasury climbed to 1.52 percent from 1.49 percent late Friday, recovering nearly half its steep slide from that day. It tends to rise and fall with expectations for the economy's strength and for inflation. The yield on the two-year Treasury initially rose, but by mid-morning was trading at 0.50 percent, little changed from Friday.

Despite the reversal from Friday for yields and other areas of the market, they're still below where they were before concerns about omicron blew through markets.

Consider the VIX, an index that measures how worried investors are about upcoming drops for the S&P 500. It eased by more than 12 percent to 25.04, but it's still well above where it was before Thanksgiving, at 18.58.

The broader market has been gaining ground since early in 2021 when vaccines were rolled out in an effort to fight the virus pandemic that stunned the global economy in 2020. Much of the concern for investors has focused on rising inflation potentially crimping what has been a solid recovery. Covid-19 has remained a lingering concern.

A surge in cases from the delta variant stunted consumer spending and worried investors over the summer. The latest threat from Covid-19 comes from the omicron variant, which was first detected in South Africa and appeared to be spreading across the globe. The European Union and the UK both announced travel restrictions from southern Africa on Friday. The US also put travel restrictions on those coming from South Africa as well as seven other African nations.

A new surge in cases represents a new threat to the global economy just as people are planning to travel for the holidays and businesses are relying on holiday shoppers. It could also complicate planning by central banks that are deciding when and how to withdraw stimulus measures that have helped keep interest rates low and aided stocks.

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