Thursday December 23rd

23-12-2021

Stock futures rise as market attempts to extend comeback rally to a third day

U.S. stock index futures pointed to a third day of gains as investors looked past earlier jitters about the spread of the omicron Covid variant. Futures contracts tied to the Dow Jones Industrial Average added 100 points, or 0.3%. S&P 500 futures rose 0.3% and Nasdaq 100 futures gained 0.2%. Reopening plays were in the green in the premarket, including Las Vegas Sans, Wynn Resorts and Carnival. Airline shares were also in the green. Helping boost sentiment were new studies suggesting that omicron has a lower risk of hospitalization than other Covid variants. On Wednesday, the Dow gained 0.7%, bringing its two-day rally to more than 800 points. The S&P 500 climbed 1% to 4,696.56 and now sits 1% away from its record. The Nasdaq Composite climbed 1.2%. All three averages are on track to end the week higher. U.S. markets are closed Friday for the Christmas holiday. The rebound, which began Tuesday, follows a three-day losing streak for the major averages spurred by fears about the speed of the spread of the latest Covid-19 variant. It was the worst decline for the S&P over a three-day period since September. For the Nasdaq, it was the worst three-day stretch since May. “December is a month where we’re not supposed to see much volatility, but we have thanks to the omicron variant news,” said Angelo Kourkafas, an investment strategist at Edward Jones. “The last two days we have seen a very strong rebound, and now we are actually within breathing distance of record highs. In our view this two-day rally reflects confidence that the economy will be able to successfully navigate the threat from the omicron variant.” Still, trading was relatively thin and is expected to continue to be so heading into the Christmas holiday. Economic data out Thursday morning showed a strong economy with improving labor and spending trends, but inflation at uncomfortable levels. Jobless claims for the week ended December 18 came in about as expected at 205,000. Durable goods for November rose 2.5%, compared to the 1.5% Dow Jones estimate. Personal income and spending showed increases for November. But on the inflation side, the Federal Reserve’s closely watched core personal consumption expenditures index rose 0.6% in November from the month prior. Core PCE rose 4.7% year-over-year in November, higher than the 4.5% rate expected. On Wednesday the Food and Drug Administration granted emergency use authorization for Pfizer’s Covid pill, the first oral antiviral drug against the virus. The drugmaker’s shares gained about 1%. Shares in Asia-Pacific rose on Thursday as fears over the omicron Covid variant eased. Hong Kong’s Hang Seng index closed 0.4% higher at 23,193.64. Mainland Chinese stocks closed higher, with the Shanghai composite up 0.57% to 3,643.34 while the Shenzhen component climbed 0.491% to 14,863.93. Investors continued monitoring Covid developments in the country after the major Chinese city of Xi’an entered a lockdown on Thursday as authorities seek to control a flare-up of Covid cases. The Nikkei 225 in Japan nudged 0.83% higher to close at 28,798.37 while the Topix index gained 0.91% to 1,989.43. South Korea’s Kospi finished its trading day 0.46% higher at 2,998.17. Oil prices shrugged off early gains on Thursday as countries imposed new travel curbs to combat surging cases, though the downside remained capped over positive developments around COVID-19. U.S. West Texas Intermediate (WTI) crude futures were down 3 cents at $72.73 a barrel after jumping 2.3% in the previous session. Brent crude futures advanced 6 cents, or 0.1%, to $75.35 a barrel, after a 1.8% gain in the previous session. Gold prices edged higher on Thursday in thin, yet supportive, year-end trading en route to a weekly gain, although an improved risk appetite capped bullion’s rise. Spot gold rose 0.2% to $1,807.49 per ounce by 0944 GMT, U.S. gold futures climbed 0.3% to $1,808.30.