The Dow Jones Industrial Average rose for a sixth straight day Wednesday as traders continued to assess the threat of the omicron Covid-19 variant.
The Dow added about 100 points, or 0.3%. The S&P 500 ticked up 0.1%. The tech-heavy Nasdaq Composite dipped 0.1%.
Investors are hoping to end the year on a high note with the S&P 500 returning more than 27% in 2021 and the Dow up more than 19%. The two indexes are both within striking distance of their all-time highs.
Historically, the market rises during the “Santa Claus rally” period — the last five trading days of December and the first two of January.
“It appears the rally could very well put the S&P 500 at, or at least very near, an all-time record high as we close out the year,” Scott Wren, senior global market strategist at Wells Fargo Investment Institute, said in a note Wednesday.
Biogen surged roughly 9% and led the S&P 500 after a report in South Korean media that the biotechnology company is in talks to be acquired by Samsung. The deal would reportedly be worth more than $40 billion. Biogen declined to comment on the report.
Nike, Walgreens and Home Depot were the top gainers on the Dow, each rising more than 1%.
On the downside, travel-related stocks struggled. American Airlines pulled back more than 2% and Alaska Air fell more than 1%. Carnival and Norwegian Cruise Line both traded lower. Boeing led decliners on the Dow.
Higher-growth technology stocks dipped as the benchmark U.S. 10-year Treasury yield jumped above the 1.5% level. Rising rates discount the value of future earnings and therefore can hit growth stocks like technology names particularly hard. AMD lost 2.9% while Nvidia fell 1.1%
Investors continue to monitor developments with the omicron Covid strain.
The U.S. has confirmed more than 4.5 million Covid cases this month, according to data from Johns Hopkins University. That’s well above November’s tally of 2.54 million. The country’s seven-day average of cases is also at 260,133.29 cases, more than 260% higher than the average from Nov. 28.
However, the Centers for Disease Control and Prevention this week shortened its isolation recommendation for people who test positive from 10 days to five if they don’t have symptoms. Research from South Africa also suggests that omicron infections can boost immunity against the delta variant.
Stocks were under pressure in late November, when news of the omicron variant first broke. They have since rebounded, however, with the S&P 500 up nearly 5% for December.
The market has shown resiliency in the past few weeks as traders weigh the omicron variant and potentially tighter monetary policy from the Federal Reserve next year, Virtus Investment Partners’ Joe Terranova told CNBC’s “Closing Bell” on Monday.
He noted, though, that the “risk profile of the market is clearly changing” due to the potential for higher volatility in the new year.
The market is “gravitating toward a more qualitative holding,” Terranova said. “I don’t think the market wants the speculative areas in which investors have been rewarded the last couple of years. That’s the hyper-growth stocks.”
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