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The US stocks continue trading higher hitting record levels on the first day of 2022. It looks like investors have shrugged off concerns about the rising number of Covid Omicron cases.
Wall Street investors welcomed the first trading day of 2022 with open arms as the US stock market touched record highs on Monday, January 3. This comes despite the latest surge in the Covid Omicron cases in the US.
On Monday, the Dow Jones Industrial Average (INDEXDJX: .DJI) gained another 246 points or 0.68% closing at a record high level of 36,585. Similarly, the S&P 500 (INDEXSP: .INX) gained 0.6% to close at a new record high of 4,796 levels. The Nasdaq Composite (INDEXNASDAQ: .IXIC) was leading the gains at 1.2% hitting a new all-time high of 15,832 levels. Speaking to CNBC, Tom Hainlin, global investment strategist at US Bank Wealth Management said:
“It’s a glass-half-full start to the year and that’s been our perspective throughout 2021 and heading into 2022. We’re still in that modestly optimistic outlook for the year ahead and think the economy and corporate profits are set up to support rising equity prices, at least in the first part of the year.”
Apple and Tesla Were Leading the Rally
On Monday, Apple Inc (NASDAQ: AAPL) stock touched new record highs as Apple became the first company ever to touch $3 trillion valuations. The AAPL stock gained 2.5% closing at $182.
On the other hand, TSLA stock showed strong momentum as the electric carmaker reported record deliveries of 308,000 during the fourth quarter of 2021. Tesla Inc (NASDAQ: TSLA) stock gained a staggering 13.5% on Monday closing at $1,199 levels. Apart from Tesla, other carmakers also rallied on Wall Street. The stock of Ford Motor Company (NYSE: F) gained 4.8% while General Motors Company (NYSE: F) surged by 4.3%.
Interestingly, the reopening stocks also pushed higher on Monday as investors shrugged off concerns regarding holiday flight cancellations. American Airlines (NASDAQ: AAL) surged by 4.4% while United Airlines (NASDAQ: UAL) surged by 3.9%. As CNBC reports:
“Norwegian Cruise Line and Carnival Corp were among the top gainers in the S&P 500, adding about 6.9% and 6.4%, respectively”.
Bank of America (NYSE: BAC) noted that stocks usually have the tendency to gain at the start of the year. The S&P 500 has gained during the first week of the calendar year for 11 of the last 13 years. For 2021, the S&P 500 has already recorded a solid 27% surge.
Concerns Surrounding Covid Omicron Cases
The Covid Omicron cases have been on the surge in the US over the last few weeks. This has forced some businesses and schools to reconsider temporary closure. It has also led to thousands of flight cancellations during the holiday season. Besides, a majority of the Wall Street banks have also asked its employees to work from home.
Although the number of Omicron Covid cases are rising, data shows that it hasn’t led to major hospitalizations. Dr. Anthony Fauci, the infectious diseases expert has said that the US officials will soon update the guidelines. Liz Young, SoFi’s head of investment strategy expects that inflation is here to stay. “What we saw with this last wave is it impacted supply and not demand, which tells me that inflation is still here to stay for the first half of 2022,” he added.