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The US stock market recorded an encompassing resurgence on Thursday after investors came to terms with the fact that the discovered Omicron variants are not as deadly as feared.
Of the two cases reported, that of Minnesota has already recovered from the virus while that of the California resident showed only mild symptoms. The Dow Jones Industrial Average (INDEXDJX: .DJI) rebounded 1.82%, adding 617 points to close Thursday’s session at 34,639.79. The S&P 500 (INDEXSP: .INX) closed 4,577.10, atop a 1.42% growth while the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) advanced by 0.83% to end the day at 15,381.32. Despite these obvious bullish reactions, analysts are not clearing the US stock market for a continuous bullish advancement moving forward.
“We’ve seen this movie before and Wall Street will likely remain COVID-variant headline-driven until a clear assessment over this wave can be made,” said Ed Moya, senior market analyst at Oanda. “The next couple of weeks will likely see risk appetite take a cue from incremental Omicron updates, supply chain issues, and every inflation reading.”
Despite the latest gains recorded across the board, the S&P 500 is off its growth mark by 0.4% this week, the Dow Jones is down 0.7% while the Nasdaq Composite has also lost 0.7% since the start of the week.
“While it is nice to see a rally, I am not sure investors should put much meaning into it,” said Jim Paulsen, chief investment strategist for Leuthold Group. “Fear and greed will dominate activity as investor worries oscillate between concerns the worst is not yet over and anxieties of missing out on any recovery.”
In response to the current case of the Omicron variant, there are no national lockdowns instituted yet, however, the Biden administration wants every business to adhere to strict COVID-19 guidelines in dealing with clients.
US Stock Market and Companies Moving the Tick
The advancement of the Dow Jones was largely fueled by the upsurge in the shares of Boeing Co (NYSE: BA) which rode on the news that the Civil Aviation Authority of China (CAAC) has cleared the company to fly the 737 Max in its airspace again. BA jumped 7.54% to $202.38 on Thursday.
Thursday’s rally was also fueled by airline, casino, and energy stocks with Delta Air Lines Inc (NYSE: DAL) rising about 9.3%, MGM Resorts International (NYSE: MGM) added 7.65%, and Hilton Hotels Corporation (NYSE: HLT) gained 7.41% to $139.59.
The plans to begin tapering down the asset purchases are still being fronted by the Federal Reserve Chairman Jerome Powell. The Fed boss maintained the fact that the “economy is very strong and inflationary pressures are higher, and it is, therefore, appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner.”
With jobs reports billed to be published today, more insights into the health of the market will be gleaned.