Omicron variant: Stocks rebound after plunge


Jason Ryan, Staff

Header Image: New York Times

The stock market rebounds after the temporary plunge as investors assess the economic risk from the new Omicron Variant of COVID-19. 

Confirmed cases of the new Omicron coronavirus variant have on Friday continued to grow around the world, triggering the discovery as a strain on many countries to try and seal themselves off by imposing travel restrictions, while also sending stocks tumbling and causing oil prices to fall.

That being said, stocks have made a comeback Monday, bouncing back from the steep selloff last Friday where investors feared the Omicron COVID variant would disrupt the global economic rebound. Reports of the new Omicron variant of the coronavirus brought back memories of last summer when the fast-spreading Delta variant put a major dent in the recovery of the stock market. This discovery spooked investors on a traditionally quiet day in the market following Thanksgiving, leading to one of the worst days for stocks this year.

The most powerful lift for stocks came from those that have been able to grow strongly almost regardless of the economy’s strength or pandemic’s pall. Gains for five big tech-oriented stocks — Microsoft, Tesla, Apple, Amazon and Nvidia — which alone accounted for more than a third of the S&P 500’s rise. The gains for tech-oriented stocks also helped to drive the Nasdaq composite up a market-leading 1.9 percent.

The S&P 500 rose 1.3 percent to recover more than half of its drop from Friday, which was its worst since February. Treasury bond yields, which fell Friday as investors were gunning for safety, reversed course and rose Monday. In particular, the 10-year U.S. government bond yielded 1.52 percent when the New York Stock Exchange closed.

Travel-related stocks started the day Monday with gains but fell back as more caution filtered into the market and as travel restrictions around the world remained in force. They closed mixed after President Joe Biden said he was not considering a widespread U.S. lockdown. He stated the variant was a cause for concern and “not a cause for panic.” That being said, Delta Air Lines and American Airlines closed slightly lower, while cruise line operators Carnival and Norwegian Cruise Lines actually notched gains.

While the market has steadied itself, uneasiness still hangs over it due to the discovery of the variant, as the virus appears to spread more easily, and countries around the world have put up barriers to travel in hopes of slowing it. Still to be seen is how effective currently available vaccines are for the variant, and how long it may take to develop new Omicron-specific vaccines. It is evident that the Omicron variant is hitting markets less hard than other COVID variants, but just as the market quickly bounced back from its Delta fears, history appears to be repeating itself: investors are taking a breath and sensing a buying opportunity.

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