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Stocks resume rally for third day; bonds slide


U.S. equities rose Wednesday, putting the S&P 500 on track for its biggest three-day rally in a year.

The benchmark index gained 0.3%, along with the technology-heavy Nasdaq 100, as fears over the omicron virus variant eased after Pfizer and BioNTech said early lab studies showed a third dose of their Covid-19 vaccine neutralizes the variant.

"Risk assets are recovering this week after a bout of turbulence sparked by the emergence of the new virus variant," said Art Hogan, chief markets strategist at National Securities. "Early studies showed vaccines provide a partial shield against the new variant. So far, omicron cases haven't overwhelmed hospitals and vaccine developments are encouraging."

Travel shares gained with airlines including American, Delta and United higher. However, losses in consumer staples and financials weighed on the market as technology shares struggled for direction.

Wall Street analysts expect the market to remain volatile until there is more clarity on the omicron variant's threat to the economy, which if low, should allow the market's focus to return to the Federal Reserve.

"If omicron concerns continue to fade, attention will shift back to the Fed and the outlook for growth," Dennis DeBusschere of 22V Research wrote in a note to clients.

"We're really in a new regime here," Alicia Levine, head of equities and capital markets advisory at BNY Mellon Wealth Management, said of the Fed's hawkish tilt on Bloomberg TV. "And with that comes implications for asset classes."

Treasury yields advanced, with the 10 year rising to 1.51%. The dollar dipped and crude oil gained. Meanwhile, in Europe, stocks fell 0.6% with market sentiment hurt by reports that the U.K. is close to announcing new curbs, including vaccine passports for large venues and an order to work from home.

"All of this whipsawing around, I don't think you have an easy time pointing to one particular news item each day over the last several days that's caused it," said Tim Courtney, chief investment officer at Exencial Wealth Advisors. "We've gone 20 months and still have not had a correction, and I think that is fueling some volatility."

Stocks

--The S&P 500 rose 0.3% as of 3:31 p.m. New York time

--The Nasdaq 100 rose 0.3%

--The Dow Jones Industrial Average was little changed

--The MSCI World index rose 0.4%

Currencies

--The Bloomberg Dollar Spot Index fell 0.3%

--The euro rose 0.8% to $1.1354

--The British pound was little changed at $1.3237

--The Japanese yen was little changed at 113.64 per dollar

Bonds

--The yield on 10-year Treasuries advanced three basis points to 1.51%

--Germany's 10-year yield advanced six basis points to -0.31%

--Britain's 10-year yield advanced five basis points to 0.78%

Commodities

--West Texas Intermediate crude rose 0.7% to $72.56 a barrel

--Gold futures rose 0.2% to $1,787.50 an ounce

Published : December 08, 2021

By : Bloomberg