U.S. stocks were mixed Tuesday as the major stock indexes looked to build on record highs in the final week of the year.
The S&P 500 dipped 0.2% after reaching a new intraday high earlier in the session. The Dow Jones Industrial Average added about 50 points, or 0.1%. The Nasdaq Composite fell 0.6%.
The move comes after stocks rallied in Monday’s regular session, with the S&P 500 closing at its 69th record high of the year.
Markets continued to look to pandemic news for direction with the threat of the omicron variant looming large.
“We’re unwinding some of that knee jerk and initial reaction for the omicron variant,” said Victoria Fernandez, Crossmark Global Investments chief market strategist.
The Centers for Disease Control and Prevention announced on Monday that it was shortening its isolation recommendation for people who test positive to five days from 10, if those people do not have symptoms.
Research out of South Africa also indicated that omicron infections can help boost immunity to the earlier delta strain of Covid.
Covid drug makers traded lower amid the omicron developments. Pfizer fell 3.1% and Moderna retreated 2.8%.
Chip stocks that rallied in the previous session fell Tuesday. Nvidia and Applied Materials both dipped more than 2%.
On the upside, travel-related stocks hit hard in Monday’s session rebounded Tuesday. Aircraft maker Boeing led the Dow with a 1.5% gain. United Airlines was among the S&P 500’s top gainers, rising 1.7%. Cruise line Carnival added 1.1%.
“If the market isn’t beaten down by this new Covid variant, I think it tells you there’s nothing stopping the market from keeping on advancing the rest of the year,” Margaret Patel, Allspring Global Investments senior portfolio manager, told CNBC’s “Squawk on the Street” on Tuesday.
Stocks historically rise in light trading during the final days of the year, often called the “Santa Claus rally.”
However, many Wall Street pros predict relatively small gains for stocks in 2022 after two strong years.
“If you look around Wall Street, you see very tame expectations, and it’s probably a reflection that we’re probably pretty late in the cycle,” Jim Lacamp, senior vice president at Morgan Stanley Wealth Management, said Monday on “Closing Bell.”
For the year, the S&P 500 is up more than 27% and the Nasdaq is up about 23%. The Dow is the relative laggard, up more than 19%.
