Wall Street advances but investors on edge with Omicron, inflation fears

A Wall Street banner outside the New York Stock Exchange amid the coronavirus (COVID-19) pandemic in New York City’s Manhattan borough, New York, US, April 16, 2021. REUTERS/Carlo Allegri/File Photo

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  • Merck as FDA panel votes narrowly to support COVID pills
  • Special payroll, factory activity increased in November
  • Salesforce falls on disappointing profit forecast
  • Dow Jones down 0.05%, Standard & Poor’s 0.20%, Nasdaq down 0.35%

Dec 1 (Reuters) – The Standard & Poor’s Index rose on Wednesday after faltering the previous session but pared much of its gains in the late afternoon as investors remained nervous about the latest variable of the coronavirus, rising inflation and US Federal Reserve policy.

After advancing 1.9% earlier in the day, the S&P 500 gave up most of those gains in the late afternoon, while the Dow and Nasdaq indices turned negative.

The US Centers for Disease Control confirmed the first case of the Omicron variant detected in the country and that the person had returned from South Africa on November 22.

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Wall Street fell on Tuesday after Federal Reserve Chairman Jerome Powell said the central bank would consider accelerating the withdrawal of its bond-buying program at its December meeting amid a spike in inflation and a stronger economy.

On Wednesday, Powell said policymakers need to be prepared to respond to the possibility that inflation will not abate in the second half of next year as expected. Read more

It’s not surprising to see the volatility as investors digest significant uncertainties including a lack of information on the Omicron variable and recent signals from the Federal Reserve that are “potentially significant changes in market expectations,” said Lauren Goodwin, economist and portfolio strategist at New York Live Investments.

However, investors were also reacting to the positive economic data released on Wednesday morning “to remind investors that the economic and business backdrop for this market is really strong.”

“For many investors, this volatility is a buying opportunity,” Goodwin said, referring to strong private payroll data and purchasing managers.

US manufacturing activity rebounded in November amid strong demand for commodities. Read more

By 2:19 p.m. EDT (1919 GMT), the Dow Jones Industrial Average (.DJI) The Standard & Poor’s Index fell 15.67 points, or 0.05%, to 34468.05 points (.SPX) It rose 9.13 points, or 0.20%, to 4576.13 points, and the Nasdaq Composite (nineteenth) It fell 55.00 points, or 0.35%, to 15,482.69 points.

After rising as much as 2.5% on the late morning session peak so far, the Russell 2000 Index of small cap companies (.rut) The last drop was 0.4%.

While all 11 major S&P sectors were advancing in the early afternoon, the telecom services sector (.SPLRCL) It fell into the red in afternoon trading.

The biggest advance was the facilities (.SPLRCU), often seen as a defensive sector, followed by the healthcare sector (.SPXHC).

Merck & Co (MRK.N) It gained 1% after a panel of U.S. Food and Drug Administration advisors voted narrowly to recommend the agency to license the manufacturer’s antiviral pills for COVID-19. Read more

Like S&P, the largest US bank (.SPXBK) They pared their gains as the session dragged on, last trading up less than 1% after rising 2.9% earlier in the day.

The World Health Organization said it expects to have more information about the transmissibility of the Omicron variant within days, and that the agency believes current COVID-19 vaccines will work against the variant. Read more

Salesforce.com (CRM.N) Expect current quarter earnings below estimates as it faces stiff competition from competitors including Microsoft, which has sent its shares down 9.7%.[nL4N2SL4DM]

Advance issues outnumbered declining issues on the New York Stock Exchange by 1.12 to 1; On the Nasdaq, the ratio was 1.60 to 1 in favor of declining stocks.

The S&P 500 hit 13 new 52-week highs and 27 new lows; Nasdaq Composite recorded 36 new highs and 328 new lows.

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Additional reporting by Devik Jain, Ambar Waric and Medha Singh in Bengaluru and Sinad Karo in New York; Editing by Margarita Choi and Magu Samuel

Our criteria: Thomson Reuters Trust Principles.

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