U.S. stocks closed higher for the second consecutive session on Tuesday as investors shrugged off fears of the Omicron variant of the coronavirus after reports suggested that the mutant is less severe than originally thought. The rally was driven by tech stocks. All the three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1.4% or 492.4 points to close at 35,719.43 points.
Shares of The Goldman Sachs Group, Inc.
GS
gained 2.8%, while Microsoft Corporation
MSFT
rallied 2.7%. Microsoft carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
The S&P 500 jumped 2.1% or 95.08 points to close at 4,686.75 points, registering its best close in a week, recording its best day since Mar 1. Consumer discretionary, technology and energy stocks were the best performers.
The Consumer Discretionary Select Sector SPDR (XLY) gained 2.3%, while the Technology Select Sector SPDR (XLK) advanced 3.5%. The Energy Select Sector SPDR (XLE) also climbed 2.3%. All the 11 sectors of the benchmark index ended in positive territory for the second straight day.
The tech-heavy Nasdaq climbed 3% or 461.76 points to end at 15,686.92 points, recording its best day since Mar 9.
The fear-gauge CBOE Volatility Index (VIX) was down 19.46% to 21.89. A total of 11.38 billion shares were traded on Tuesday, lower than the last 20-session average of 11.55 billion. Advancers outnumbered decliners on the NYSE by a 4.10-to-1 ratio. On Nasdaq, a 3.37-to-1 ratio favored advancing issues.
Omicron Fears Fade Boosting Investors’ Confidence
Last week saw huge sell off on fears of the Omicron variant of the coronavirus. However, investors started the week on a high as fears somewhat subsided after Dr. Anthony Fauci, Joe Biden’s Chief Medical Advisor, said that the variant doesn’t look as threatening it was earlier believed to be. This sent stocks on a rally.
The momentum continued into Tuesday, with investors regaining lost confidence. More good news on the Omicron variant came in on Tuesday after GlaxoSmithKline plc
GSK
said that its recent preclinical studies suggested that its sotrovimab antibody works against the omicron variant. This sent the company shares on a rally, gaining 1.5%.
Tuesday’s rally was mainly driven by tech and energy stocks that have been taking a beating lately. Shares of Adobe Inc.
ADBE
jumped 4.5%, while Meta Platforms, Inc.
FB
, and Apple, Inc. advanced 1.6% and 3.5%, respectively.
Economic Data
In economic data released on Tuesday, U.S. trade deficit declined 18% in October as exports hit a 13-year high, while imports slowed down somewhat due congestions at U.S. ports. The gap stood at $67.1 billion in October from a staggering $81.4 billion in September.
U.S. exports jumped 8.1% to hit a record high of $223.6 billion. This also reflects its biggest monthly gain since 2008. However, imports rose less than 1% $290.7 billion. However, it still remains at an all-time high.
A separate report showed that productivity costs in the third quarter declined 5.2%, declining 20 basis points from the prior read. Also, unit labor costs in third-quarter went up 9.6%.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report