Investors are waiting for more clues about the damage that the new strain of coronavirus can do to the economy. The S&P 500 gained more than half of its decline on Friday.
Stock prices recovered on Monday on the New York Stock Exchange after the sharp drop suffered last week when the new variant of the coronavirus was discovered.
Wall Street stocks closed higher on Monday, regaining some of the ground lost on Friday as investors seemed hopeful that the omicron variant of the coronavirus would not cause lockdowns after reassuring words from US President Joe Biden.
The Nasdaq led gains among indices with help from the technology sector. At the same time, the S&P and Dow Jones advanced after suffering their most significant daily percentage declines in months in Friday's session, as investors worried about disruptions ahead. Could cause the new variant of COVID-19.
Biden said Monday that omicron-related lockdowns were out of the question, for now, noting that the variance was a cause for concern but not panic.
He urged Americans to get vaccinated and wear masks indoors. He also said the United States was working with drug companies to make contingency plans if new vaccines were needed.
The comments and indications from pharmaceutical companies that they are taking the variant seriously were reassuring to investors, who had been concerned about the possibility of further restrictions due to COVID.
"Friday was a significant risk reduction event. Unfortunately, the market returned to its worst fears about the spread of COVID and the return of lockdowns, "said Edward Moya, senior market analyst at OANDA.
"Now you start to see a certain optimism when you listen to the president when you listen to the CEO of Pfizer. So the omicron panic is easing, and we are in a wait and see period, "he added.
Vaccine makers such as Pfizer, its partner BioNTech and rivals Moderna and Johnson & Johnson said Monday they are working on vaccines that specifically target omicron if their existing vaccines are not effective against the variant.
According to preliminary data, the S&P 500 gained 58.74 points, or 1.28%, to 4,654.43 units, while the Nasdaq added 288.61 points, or 1.86%, to 15,780.27 units. The Dow Jones Industrial Average rose 226.75 points, or 0.65%, to 35,126.09. Among the top 11 S&P sectors, tech-led the percentage gains.
Omicron variant limits oil price rally.
The rebound in oil prices was finally contained on Monday after Friday's crash, and the possible consequences of the omicron variant on the global economy robbed the market of momentum.
In London, a barrel of Brent for January delivery registered a gain of 0.99% to close at 73.44 dollars, after having risen 5.91% during the session. However, on Friday, it lost 11.55% in its worst session since April 2020.
Meanwhile, a barrel of West Texas Intermediate (WTI) for January recovered 2.64% from the close on Friday - when it lost 13.06% - and ended at $ 69.95.
"It is simply the risk of destruction of demand (for crude by the new variant) that has the greatest impact on the market," said Robert Yawger, director of energy futures at Mizuho Securities.
There is still not enough scientific information; information is lacking on the severity of the cases or the possible resistance of the omicron variant to existing vaccines against covid. But several countries have already suspended flights from southern Africa. At the same time, Japan and Israel closed their borders to foreigners to prevent the spread of the new variant of the coronavirus.