Wall Street subdued as Omicron worries overshadow vaccine update

NEW YORK: US stocks struggled for direction in volatile trading on Wednesday as investors digested a fresh update on Pfizer and BioNTech’s COVID-19 vaccine, while the fast-spreading Omicron variant kept bigger bets in check.

Pfizer and BioNTech said their three-shot course of COVID-19 vaccine was shown to have a neutralizing effect against the new coronavirus variant in a laboratory test.

“This is really the first positive news in terms of the potential effectiveness of existing vaccines,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

Travel stocks also rebounded, with the S&P 1500 Airlines index up 3.7%, while Norwegian Cruise Line led gains among cruise liners.

Even as the vaccine update helped calm nerves earlier in the session, there is still very little known about the new variant of the coronavirus.

Nine of the 11 major S&P 500 sector indexes rose in early trading, while the tech-heavy Nasdaq struggled for direction.

Technology-oriented growth stocks, which have been on the rise since the beginning of the week, gave back some gains after the opening bell.

Tesla Inc, Alphabet, Microsoft and Apple shed between 0.1% and 0.4%.

Wall Street swung wildly last week as investors fretted that the spread of the new variant could force countries to lay down new restrictions, upending a global recovery at a time when central banks around the world are contemplating a move to pre-pandemic policy environment.

At 10:10 a.m. ET the Dow Jones Industrial Average was up 43.89 points, or 0.12%, at 35,763.32, the S&P 500 was up 1.10 points, or 0.02%, at 4,687.85 and the Nasdaq Composite was down 22.33 points, or 0.14%, at 15,664.59.

Markets were, however, still cautious after reports earlier in the day said Britain could implement tougher COVID-19 measures, including advice to work from home, as early as Thursday in a bid to slow the spread of the Omicron variant.

The Omicron variant has been reported in 57 nations and the number of patients needing hospitalization is likely to rise as it spreads, the World Health Organization said on Wednesday.

Goodyear Tire & Rubber Co rose 7.1% after Deutsche Bank upgraded the stock to “buy” from “hold”.

Advancing issues outnumbered decliners by a 1.71-to-1 ratio on the NYSE and by a 1.10-to-1 ratio on the Nasdaq.

The S&P index recorded 26 new 52-week highs and no new low, while the Nasdaq recorded 20 new highs and 18 new lows.