(Bloomberg) — U.S. stocks rose in thin trading a day after notching another all-time high in the final days of the year. Treasury yields edged lower while the dollar held steady.
The S&P 500 extended a year-end rally after hitting its 70th record close of the year. Megacaps including Apple Inc., Amazon.com Inc. and Nvidia Corp. contributed the most to the benchmark’s gains and also led the tech-heavy Nasdaq 100 higher. Meanwhile, the Russell 2000, a proxy for the reopening trade, outperformed other benchmarks, climbing 0.9%.
In an illustration of still-solid labor demand despite the latest coronavirus wave, data Thursday showed jobless claims unexpectedly fell last week while continuing claims dropped to the lowest level since March of last year. A measure of Chicago business activity rose in December more than economists predicted.
“Usually we get the Santa Claus rally but then these last couple of days can be pretty volatile,” Chris Gaffney, president of world markets at TIAA Bank, said in an interview. Managers can decide to lock in gains, but “we’re not seeing that this year,” he said. “The economic environment, fundamentals for companies are still very strong.”
The 10-year Treasury yield dropped back toward its 50-day moving average, while yields across most of Europe also dipped after Wednesday’s global sovereign-bond retreat. A dollar gauge was little changed.
The number of Covid-19 cases soared 32% to a record 1.73 million on Wednesday, marking the third day in a row with more than a million new infections worldwide. Still, more evidence is emerging that omicron may be less dangerous, particularly in vaccinated people, as virus deaths in the U.S. declined.
As the year draws to a close, investors are assessing the implications of the fast-spreading omicron coronavirus variant, elevated inflation caused by supply bottlenecks and removal of stimulus measures, including monetary policy tightening, notably by the Federal Reserve.
“At the year-end, there’s nothing dramatically changing in terms of new information on macro changes,” said Colin Stewart, head of Americas at Quant Insight. “Into January, what we’re seeing now on the S&P is that the S&P is actually quite comfortable with rises in the Fed rate expectations. In fact, that’s the number one positive driver on this short-term S&P.”
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 11:53 a.m. New York time
- The Nasdaq 100 rose 0.3%
- The Dow Jones Industrial Average was little changed
- The Stoxx Europe 600 rose 0.1%
- The MSCI World index rose 0.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro fell 0.3% to $1.1318
- The British pound was little changed at $1.3498
- The Japanese yen fell 0.2% to 115.18 per dollar
Bonds
- The yield on 10-year Treasuries declined two basis points to 1.53%
- Germany’s 10-year yield advanced one basis point to -0.17%
- Britain’s 10-year yield declined three basis points to 0.98%
Commodities
- West Texas Intermediate crude rose 0.4% to $76.89 a barrel
- Gold futures rose 0.4% to $1,813.50 an ounce
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