NEW YORK: The Dow and the S&P 500 rebounded on Thursday, boosted by financials shares and Boeing as rising cases of the new Omicron variant globally continued to drive volatility across markets.
Boeing Co jumped 3.5% after China’s aviation authority issued an airworthiness directive on the 737 MAX jets that will help pave the way for the model’s return to service in China.
Kroger Co surged 9.9% to top the S&P 500 after the retailer raised full-year sales and profit forecasts, boosted by sustained demand for groceries.
Travel and leisure stocks bounced back, with S&P 1500 Airlines and the S&P 1500 Hotels, Restaurant and Leisure indexes rising 4.5% and 2.8%, respectively.
All of the 11 major S&P sectors advanced in early trading, with eight of them surging more than 1% each. Financials led the pack, up 2.3%.
Wall Street’s main indexes closed below key technical levels on Wednesday, with the Dow breaching its 200-day moving average for the first time since July 2020 on growing angst about the latest coronavirus variant and the Federal Reserve’s hawkish comments.
“It is a bit of a ‘buy the dip’ environment ... uncertainty will persist over the next week or so as scientists do more studies over the new variant,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
“I still think investors want to focus on equities, they just need to be given a reason to do so.”
Wall Street whipsawed this week as investors scrambled for bargains after every drawdown. Still, the three indexes are tracking sharp weekly losses, with the Dow on pace for its fourth straight fall.
The United States and Germany joined countries around the globe planning stricter COVID-19 restrictions as the Omicron variant rattled markets, fearful it could choke a tentative economic recovery from the pandemic.
The CBOE volatility index, also known as Wall Street’s fear gauge, was last trading at 28.6 points, a day after hitting its highest level since February.
At 10:27 a.m. ET, the Dow Jones Industrial Average was up 462.69 points, or 1.36%, at 34,484.73 and the S&P 500 was up 43.36 points, or 0.96%, at 4,556.40.
The Nasdaq Composite was up 31.90 points, or 0.21%, at 15,285.96, supported by shares of Amazon.com, Tesla Inc, Microsoft Corp and Nvidia Corp.
Apple Inc fell 2.7% after Bloomberg reported about slowing demand for Apple’s iPhone 13.
Meanwhile, lawmakers reached an agreement to fund the U.S. government until Feb. 18 as they scramble to avoid a partial government shutdown this weekend.
Stellar earnings reports and strong economic growth have powered U.S. stocks to a series of record highs in November, with the S&P 500 climbing 20.1% so far this year.
A Reuters poll of equity analysts said a correction was likely in the next six months, with the benchmark expected to gain 7.5% between now and end-2022 to finish at 4,910.
Advancing issues outnumbered decliners by a 2.63-to-1 ratio on the NYSE and a 1.43-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and nine new lows, while the Nasdaq recorded seven new highs and 393 new lows.
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