NY Stock Market Surges as Omicron Variant Concerns Ease... Limited Rebound in Tech Stocks

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Major indices on the New York Stock Exchange successfully rebounded sharply, led by travel stocks. Analysts attribute this to reduced concerns about the Omicron variant, which stimulated investor sentiment. Cyclical stocks showed strength more than tech stocks.

On the 6th (local time), the Dow Jones Industrial Average rose 1.87% to close at 35,227.03, the S&P 500 increased 1.17% to 4,591.67, and the Nasdaq ended up 0.93% at 15,225.15.

The market rally was led by travel-related sectors. Airline stocks such as United, Delta, and American surged as much as 10% during the session. Cruise lines like Norwegian and Carnival also saw sharp gains, while hotel stocks including Wynn, Hilton, and Marriott rose 3-4%. Aircraft manufacturer Boeing’s shares increased by 3.7%.

With eased concerns over Omicron, vaccine maker Moderna’s stock plunged 13.4%. BioNTech, which co-developed the vaccine with Pfizer, dropped 18.6%.

Tesla closed down 0.59% at $1,009 after news emerged that the SEC has launched an investigation into its solar panel business.

Lucid Motors fell 5.1%, and Digital World Acquisition, which plans to merge with former President Donald Trump’s social media platform, plunged 10% amid reports that the SEC is investigating SPAC mergers. The SEC is reportedly scrutinizing issues related to listings via SPACs.

Apple, which had been on a record-breaking run amid safe-haven demand, rebounded 2.15%, restarting its upward momentum.

Semiconductor leader Nvidia continued its slump, falling 2.1% on the day.

Nvidia has been declining since the U.S. Federal Trade Commission (FTC) decided to oppose its merger with UK-based ARM. AMD, which had also led the semiconductor rally alongside Nvidia, dropped 3.4%.

Online media company BuzzFeed, which went public via a SPAC merger and saw gains on the Nasdaq that day, experienced a 10.6% drop in its stock price.

As investor sentiment stabilized, the VIX, known as the fear index, fell 10.9%.

Rising U.S. Treasury yields also contributed to the market recovery. The 10-year U.S. Treasury yield rose 0.1 percentage points from the previous trading day to 1.441%. Last week, the yield had fallen to 1.34% amid a flight to safety triggered by Omicron variant fears.

The rise in Treasury yields lifted bank stocks such as Wells Fargo, State Street, and First Republic Bank by nearly 3%.

The increase in Treasury yields also boosted the value of the U.S. dollar. The dollar index rose 0.19% to 96.3 on the day.

Chinese companies, which had plunged following Didi Chuxing’s delisting from the New York Stock Exchange and plans to list in Hong Kong, also showed strength. Didi, Alibaba, and Baidu rebounded 7-10%.

Cryptocurrencies, which had fallen consecutively after the U.S. stock market crash, showed limited gains and stabilized.

Bitcoin traded up 0.7% at $49,000, while Ethereum rose 2.5% to $4,225.

Pat Hurd, Chief Investment Officer at Kemal Kleinwort Hambros, expressed optimism, saying, "It seems that Omicron will not lead to the worst-case scenario."

This content was produced with the assistance of AI translation services.