4.05pm: Dow gives back 500-point gain as new COVID variant spreads
US stocks finished the trading session lower after the Centers for Disease Control and Prevention (CDC) confirmed the first case of the coronavirus (COVID-19) Omicron variant in the US.
At the close, the Dow dropped 462 points to 34,022, while the S&P 500 slipped 54 points at 4,513 and the tech-heavy Nasdaq fell 284 points to 15,254.
Travel stocks were among the biggest decliners, while bank stocks ended mostly in positive territory.
1.00pm: Stocks rebound and volatility subsides
US stocks climbed higher in afternoon trade, clawing back some losses sparked by worries over the Omicron variant and the unwinding of Federal Reserve stimulus.
Meanwhile, Dutch multinational banking and financial services group ING noted that “very healthy manufacturing ISM and construction data” coming after last week's robust consumer spending numbers suggests GDP will post a solid 6%+ increase in the current quarter.
“Inflation is likely to record a similar reading, meaning the case for swifter Fed policy tightening is strong,” said analysts at ING Group (NYSE:ING).
Despite the seesaw moves in global markets that have extended into Wednesday afternoon the Dow Jones Industrial Average added about 223 points, or 0.6% to 34,706.82, while the technology-heavy Nasdaq Composite rose 0.7%. Meanwhile, the S&P 500 rose more than 1%, following the benchmark index’s 1.9% fall on Tuesday.
“US markets joined in the general rally in stock markets this afternoon, after comments from the BioNTech CEO overnight and further data suggesting the Omicrom variant is less severe than others helped investors to build a more bullish outlook,” said Chris Beauchamp, Chief Market Analyst at IG, a global leader in online trading.
“Fed chairman Powell remained broadly confident on the outlook for the global economy, and from the looks of it the volatility of the past few days is subsiding into a ‘buy the dip’ approach from most investors,” he added.
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9.40am: US stocks rebound sharply Wednesday
US stocks rebounded midweek after yesterday's sharp losses as private payroll data from ADP came in stronger than expected, showing companies were hiring at a decent clip.
The report is closely watched as a pre-cursor to Friday's main event and showed new private hires increased by 534,000 for October, better than the 506,000 which had been expected.
In New York, the Dow Jones Industrial Average advanced over 236 points, or 0.69%, at 34,720. The S&P 500 gained over 45 points, or 1% at 4,612. The tech-laden Nasdaq index added over 178 points, over 1%, at 15,715.
"The labor market recovery continued to power through its challenges last month,” said ADP chief economist Nela Richardson.
"Service providers, which are more vulnerable to the pandemic, have dominated job gains this year. It’s too early to tell if the Omicron variant could potentially slow the jobs recovery in coming months."
The non-farm payrolls number on Friday is expected to show an increase of 573,000 jobs, following October’s figure of 531,000. The unemployment rate also is also seen nudging lower to 4.5%, according to Dow Jones estimates.
6.30am: US stocks seen opening higher
US stocks are expected to open higher on Wednesday, recovering from a sell-off in the previous session after US Federal Reserve chairman Jerome Powell said the US central bank will discuss speeding up its bond-buying taper at its December meeting.
Futures for the Dow Jones Industrial Average rose 0.8% in Wednesday pre-market trading, while the broader S&P 500 index gained 1.11% and those for the tech-heavy Nasdaq 100 added 1.3%.
Stocks closed lower on Tuesday after Powell's testimony before the US Senate added to concerns about the new coronavirus (COVID-19) variant, Omicron. At the close, the Dow Jones had dropped by 651 points, or 1.85%, to 34,484 and the S&P 500 fell 1.9% to 4,567. The Nasdaq Composite declined 1.55% to 15,537.
“Most equities dived yesterday, as many didn’t expect to hear a hawkish Powell at a time the new Omicron wave threatens the economic recovery,” Ipek Ozkardeskaya, senior analyst at Swissquote said.
“The kneejerk reaction from the market was strong. The S&P500 and the Dow closed the session near 2% down, as Nasdaq dropped 1.50%. The US 2-year yield rebounded dramatically, and the US yield curve flattened to the levels last seen in March 2020, since the onset of the pandemic.
"But the US equity futures rebounded as fast as they dived in the overnight trading session. Nasdaq futures are up by 1.30% at the time of writing," she added.