S&P 500 rises for a third day, nears another record as investors bet economy bucks omicron threat
U.S. stocks were slightly higher Wednesday as investors continued to bet the impact of the omicron variant of Covid-19 would not be as threatening as many previously thought.
The Dow Jones Industrial Average reversed higher near the end of the trading day, adding 35.32 points, or 0.1%, to reach 35,754.75. The S&P 500 inched 0.3% higher to 4,701.21 and sat 0.9% from its record. The tech-heavy Nasdaq Composite rose 0.6% to 15,786.99.
Some of the comeback was validated by vaccine news Wednesday. Pfizer and BioNTech said three doses of their vaccine are effective at neutralizing the omicron variant, citing their own preliminary lab tests. They also said two doses may still protect against severe disease.
Pfizer shares, which are up 6.3% in the last month, fell slightly.
Many had already anticipated the new variant would be manageable, an expectation that helped drive the rebound Monday and subsequent rally Tuesday.
"Investors have been conditioned by market history to get long, stay long, and on any sell-off, to get longer," Mike Zigmont, head of trading and research at Harvest Volatility Management, told CNBC. "This last sell off and powerful rebound just reinforced that lesson yet again. The two rallies that we had on Monday and Tuesday were so strong and they were back-to-back, and even for the most bullish of the bullish, you've got to take a pause."
Still, travel-related stocks continued roaring higher as the news gave investors added confidence in reopening bets. Norwegian Cruise Line jumped 8.2% and was the biggest gainer in the S&P 500, followed by Carnival and Royal Caribbean, which were each more than 5% higher.
Airline and casino stocks made big moves too, including United Airlines and Las Vegas Sands, which each gained more than 4%. The Invesco Dynamic Leisure and Entertainment ETF rose 1.1%.
Zigmont said the market is highly technical right now, and that investors and traders stampeded into stocks after seeing a bottom "to take advantage of what everyone thinks is coming next, which is higher highs." Those new highs probably won't come until January, however, he added.
Elsewhere, PagerDuty shares surged 11.2% after the maker of IT response software gave better-than-expected current-quarter revenue guidance.
Shares of Meta Platforms climbed 2.4% after the company gave its employees the option to delay their return to the office, currently scheduled for the end of January, by three to five months.
Apple shares are also higher by 2.2% after UBS maintained its buy rating on the stock despite recent concerns about demand for the iPhone 13.
However, those gains were offset by downward moves across the rest of the market.
Shares of Stitch Fix tumbled 23.9% after the online clothing retailer issued disappointing revenue guidance and membership metrics.
Grill maker Weber's shares fell 5.1% despite the company reporting a narrower-than-expected loss for its latest quarter.
The amount of workers who left their jobs due to dissatisfaction or better opportunities elsewhere fell in October by 4.7%, the Labor Department said in its Job Openings and Labor Turnover Survey, also known as JOLTS, on Wednesday. The level of job openings accelerated 4.1% to just below its all-time high.
The JOLTS report is closely watched by the Federal Reserve for signs of labor market tightness.
Stocks recovered this week from last week's market rout on fears of the omicron variant and a possibly faster-than-expected taper of the Fed's bond buying program.
This week's gains have put all of the major averages back within striking distance of their record highs. The Dow is about 2.2% from its record and the Nasdaq is roughly 2.6% from its all-time high.
While the majority of S&P 500 companies have reported third-quarter earnings, GameStop and Rent the Runway will report on Wednesday after the bell.