(Bloomberg) — U.S. stocks advanced in early trading on Wednesday as investors assessed the economic implications of the omicron coronavirus outbreak. Treasury yields rose.
The S&P 500 posted modest gains, after a rally in U.S. stocks stalled on Tuesday. The tech-heavy Nasdaq 100 was little changed. The yield on 10-year Treasuries climbed back above 1.50%.
Omicron fears are easing on growing evidence that the fast-spreading strain leads to milder symptoms, even as worldwide Covid-19 cases rose above 1 million for a second straight day. But the coronavirus along with Federal Reserve policy tightening and China’s outlook rank among the key risks for 2022.
“We just might get a relatively calm last week of the year after all,” Matt Maley, chief market strategist for Miller Tabak + Co. wrote. “That said, thin markets can change on a dime, so investors will want to stay nimble over the next three days.”
The dollar was steady against major peers. Crude oil slipped, and iron ore futures in Singapore and China declined for a third day. Bitcoin stayed below $48,000 after a tumble that hinted at diminished ardor for the most speculative assets.
The Stoxx Europe 600 index came to within a whisker of another record before reversing the advance. Technology shares declined, following the sector’s retreat in the U.S. and Asia, while energy stocks underperformed as European gas prices slumped for a sixth day. Most European bonds declined.
“We’re sober about potential headwinds that still could be coming, even the rest of this year, but early in 2022 — the Fed is going to be raising rates, that will change things for the markets,” Ann Miletti, head of active equity at Allspring Global Investments, said on Bloomberg Television. “We are also hopeful because as you look at a lot of the economic data, it remains strong.”
What to watch this week:
- U.S. initial jobless claims, Thursday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.2% as of 9:46 a.m. New York time
- The Nasdaq 100 was little changed
- The Dow Jones Industrial Average rose 0.2%
- The Stoxx Europe 600 fell 0.2%
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.2% to $1.1338
- The British pound rose 0.3% to $1.3470
- The Japanese yen was little changed at 114.79 per dollar
Bonds
- The yield on 10-year Treasuries advanced four basis points to 1.53%
- Germany’s 10-year yield advanced four basis points to -0.20%
- Britain’s 10-year yield advanced seven basis points to 0.99%
Commodities
- West Texas Intermediate crude fell 0.6% to $75.53 a barrel
- Gold futures fell 0.9% to $1,795.50 an ounce
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