Damian J. Troyaz and Alex Veiga
Major stocks withstood a wave of volatile trading on Wall Street on Wednesday and closed higher for the third day in a row.
The S&P 500 gained 0.3%, while 62% of the stocks in the underlying index closed higher. Subdued trading followed a strong start to the week in which the index hit its biggest gains since March. With the most recent rally, the S&P 500 has now recovered all of its losses after a two-week decline that began this week.
The Dow Jones Industrial Average rebounded from an early fall to offset 0.1% gains, while the Nasdaq composite rose 0.6%.
Markets have plunged over the past two weeks due to several issues, including rising inflation, the newest variant of the coronavirus, and how both issues could affect economic growth.
Stocks have stabilized this week after comments from Dr. Anthony Fauci, the White House’s chief medical adviser, who said early signs on Monday indicate that the omicron variant may be less dangerous than the delta.
“Overall, a more confident tone depends on the omicron news,” said Liz Ann Saunders, chief investment strategist at Charles Schwab. “No matter what happens, it’s still amazing to see all the hustle and bustle happen at the sector level.”
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The excitement in the market is likely to persist until December, she said.
The S&P 500 Index rose 14.46 points to 4,701.21 points and is now up 25.2% over the year. The Dow rose 35.32 points to 35,754.75. The blue-chip index fluctuated between a decline of 116 and a rise of 121.
The high-tech Nasdaq also dropped early before bouncing back to 100.07 to close at 15,786.99.
Small stocks outperformed the rest of the market. The Russell 2000 index rose 17.92 points, or 0.8%, to 2,271.71 points.
A wide range of tourism-related companies have been recognized, a sign of investor confidence that the industry will continue to recover despite the threat posed by the omicron variant of COVID-19.
Norwegian Cruise Line jumped 8.2%, the largest gain in the S&P 500, while rivals Carnival rallied 5.5% and Royal Caribbean gained 5.2%. United Airlines rose 4.2% and Las Vegas Sands gained 4.4%.
Tech companies account for a significant portion of the S&P 500 gains, although Apple’s 2.3% rise did most of the hard work as its weight gives it a lot of impact on the sector. Shares of other major tech companies fell, including chipmaker Nvidia, which fell 1.9% and Intel, which closed 1.6%.
Communications and healthcare stocks rose strongly. Parent company Facebook Meta Platforms rose 2.4% and Twitter shares rose 2.8%. UnitedHealth Group is up 0.9%.
Financial stocks were the largest lagging behind. JPMorgan Chase fell 1.1% and Bank of America fell 1.2%.
Energy futures were higher. The price of crude oil in the US was up 0.4%, although energy stocks were mixed.
The bond yields are up. The yield on the 10-year Treasury bond rose to 1.52% from 1.48% on Tuesday night.
Markets in Asia were generally higher. The Nikkei in Tokyo added 1.4% as economists predict the economic recovery of the world’s third-largest economy this quarter after a sharp drop in the number of cases of coronavirus.
Markets in Europe fell. Germany’s Dax lost 0.8% after the German parliament elected Olaf Scholz as the country’s ninth chancellor after World War II, ushering in a new era for the European Union’s largest economy after Angela Merkel’s 16-year tenure.
Investors will be able to better understand how the economy is doing later this week and next. On Friday, the Labor Department will provide an update on how price increases are affecting consumers with the release of the November CPI.
Next week, the Federal Reserve plans to hold a two-day meeting of policymakers, which will provide an update on the central bank’s plans to fight inflation. The Fed said it plans to accelerate the pace of the decline in bond purchases, which helped keep interest rates low. This has raised concerns that the Fed will raise benchmark interest rates earlier than expected next year.