The Associated Press
Wall Street is getting off to a solid start Tuesday after three days of losses. The S&P 500 is up 0.9% in the early going, the Nasdaq is up 1% and the Dow Jones Industrial Average climbed 1.1%. Small-company stocks rose more than the rest of the market, a signal that investors were feeling a bit more optimistic about the economy. Prices for ultra-safe U.S. government bonds fell, sending yields higher. Energy prices also rose. European and Asian markets were also higher. Nike, one of the 30 stocks in the Dow, jumped 6.7% after turning in strong quarterly results.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
BANGKOK (AP) — World shares bounced back Tuesday from a sell-off a day earlier spurred by worries about how badly the omicron variant, inflation and other forces will hit the world economy.
Markets in Europe and Asia rose and U.S. futures were higher. Oil prices also advanced.
Much of the concern over the global outlook has been driven by the omicron variant of coronavirus. Cases have skyrocketed in Europe and in the U.S., where federal health officials say it accounted for 73% of new infections last week, a nearly six-fold increase in only seven days.
Thailand was mulling tighter precautions after just recently loosening stringent quarantine rules to help its tourism sector recover.
Germany’s leaders were set to decide on new restrictions after Christmas aimed at slowing the spread of omicron, but plans so far fall short of a full lockdown. A government panel of experts called for nationwide measures to be taken within days.
In Frankfurt, the DAX jumped 0.9% to 15,381.41 and the CAC 40 in Paris also gained 0.9%, to 6,928.88. Britain’s FTSE 100 advanced 1% to 7,266.84. The future for the Dow industrials was up 0.6% while that for the S&P 500 was 0.7% higher.
In Asia, cases of coronavirus have surged in Australia and South Korea, as governments tighten precautions to prevent or curb outbreaks. But bargain-seeking traders have often opted to buy when prices fall, adding to the volatility that is common during the thin activity of the holiday season.
Tokyo’s Nikkei 225 index rose 2.1% to 28,517.59 and the Hang Seng in Hong Kong added 1.2% to 23,024.78. In Seoul, the Kospi gained 0.4% to 2,975.03, while the Shanghai Composite index picked up 0.9% to 3,625.13. In Sydney, the S&P/ASX 200 climbed 0.9% to 7,355.00.
Thailand’s SET advanced 0.4% and India’s Sensex was 0.9% higher.
Shares fell around the world on Monday and those sharp declines were “enough to sucker the fast-money FOMO gnomes in Asia into action,” Jeffrey Halley of Oanda said in a commentary.
Worries that the newest coronanvirus variant could lead factories, airplanes and drivers to burn less fuel pulled oil prices lower, but they also rebounded Tuesday, with the U.S. benchmark gaining 30 cents to $68.91 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard for pricing, rose 11 cents to $71.63 per barrel.
Omicron is not the only problem looming. Supporters of proposed $2 trillion spending program by the U.S. government were scrambling to salvage the plan after an influential senator said he could not support it. Markets are also still absorbing last week’s momentous move by the Federal Reserve to more quickly remove the aid it’s throwing at the economy, because of rising inflation.
They all combined to drag the benchmark S&P 500 1.1% lower on Monday. The Dow Jones Industrial Average fell 1.2% and the Nasdaq composite fell 1.2%. Smaller company stocks fared worse than the rest of the market with the Russell 2000 index falling 1.6%.
Renewed virus outbreaks could push inflation even higher if they result in closures at ports, factories and other key points of the long global supply chains. Such troubles helped drive prices at the consumer level in November up 6.8% from a year earlier, the fastest inflation in nearly four decades.
However, if omicron leads to lockdowns or scares consumers into staying home, economic activity could slow, and with it, the surging demand that has overwhelmed supply chains and driven up consumer prices
The worst-case scenario would see economies slowing without relief from already built-in inflation.
In currency trading, the U.S. dollar rose to 113.65 Japanese yen from 113.61 yen. The euro fell to $1.1295 from $1.1283.
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