Stocks recoup some losses as Biden says Omicron is ‘not a cause for
Stocks jumped Monday to recover some losses after Friday’s slide, when uncertainty over a new coronavirus variant stoked volatility across global markets.
The Dow advanced. On Friday, the index had seen its worst day since October 2020, dropping more than 900 points, or 2.5%. Bitcoin prices rebounded to trade above $58,000 during the afternoon session.
U.S. airlines and other travel stocks were mostly higher to steady after steep losses from late last week, when initial concerns over the newly discovered Omicron variant of the coronavirus in South Africa fueled fears over renewed global restrictions. Meanwhile, Zoom Video Communications (ZM), Peloton (PTON) and other stocks that have been mainstays of the “stay-at-home” trade gave back some of Friday’s gains. Technology stocks that had become defensive plays during the pandemic largely held up on Monday, however, and the Nasdaq outperformed with a gain of more than 2% at session highs.
“Ultimately this is not the first or last variant scare and our tech playbook over the last 18 months has been to use these macro/risk-off events as buying opportunities to own the tech sector specifically cloud, cyber-security, and 5G winners,” Wedbush analyst Dan Ives wrote in a note Monday morning. “While we are seeing a return to normalcy, a semi-remote workforce environment we believe is here to stay which underscores our tech cloud thesis into 2022 that the digital transformation build-out will be accelerated and is not a one time COVID pull forward event”
The U.S. and European Union have been among a host of destinations to ban flights from several African countries after the new variant was discovered. But cases of the variant, which the World Health Organization (WHO) has so far designated as a “variant of concern,” have also detected in regions including the U.K., Hong Kong, Australia, Germany and Italy, among others. Japan, Israel and Morocco each announced in the past few days they would be blocking foreign visitors from visiting amid the latest variant’s spread.
While much is still yet to be confirmed about the Omicron variant — including whether it is more transmissible or causes more severe illness than previous variants — vaccine makers have already said they are working to adapt their existing inoculations to the new strain. Moderna’s (MRNA). Chief Medical Officer Paul Burton told BBC on Sunday that a new vaccine to address Omicron could be widely available in early 2022. Pfizer (PFE) and BioNTech (BNTX) said last week they expected to have data on the latest variant within two weeks, and it could take about 100 days to create a vaccine specifically tailored to a new variant. The WHO has said preliminary evidence about Omicron suggested “an increased risk of reinfection with this variant, as compared to other [variants of concern].”
Many market pundits have maintained it is still too early to tell how Omicron behaves from an epidemiological standpoint and how it will…
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