Dow leaps 560 points in sharp rebound | Cramer believes in the Santa Claus rally | Goldman's picks to beat volatility
EDITOR'S NOTE
The major averages roared back from their three-day losing streak on Tuesday as investors looked past recent concerns about the omicron variant.
Indeed, speaking to the public on Tuesday afternoon, President Joe Biden said that people with booster shots are "highly protected" against the coronavirus. He also said that the U.S. isn't going back to March 2020 – a time when Covid cases soared and lockdowns ensued.
The Dow Jones Industrial Average bounced 560.54 points, helped by a nearly 5.9% gain in Boeing and a 6.1% rally in Nike. The S&P 500 and Nasdaq Composite rose about 1.8% and 2.4%, respectively.
Small-cap stocks, those most sensitive to the economic recovery, were the outperformers on Tuesday. The Russell 2000 added 2.9%.
"Traders are setting up for the end of the year, taking advantage of the weakness in consumer cyclicals on the back of omicron," said Shannon Saccocia, chief investment officer at Boston Private. "I think it still seems a bit early to jump back into these names, given the unfolding story around the variant, but perhaps optimism is taking hold as we move into lower volume sessions tomorrow and Thursday."
The rebound in equities favored reopening plays like airlines, cruise operators and casino stocks. Delta Air Lines rose 5.9%, and United Airlines gained 6.8%. Carnival added 8.6%. Las Vegas Sands jumped 8.4%. Caesars Entertainment climbed 8.7%.
Energy stocks also came back alongside U.S. oil prices. Shares of Devon Energy leapt 7.9%. "The movement in the bond market is even more telling, with the 10-year yield popping again on a rotation back to risk," added Saccocia.
The 10-year Treasury yield rebounded to nearly 1.5% after worries around omicron slowing the recovery brought it below 1.4% late last week.
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