04.09pm: Investors evaluate Omicron
US stocks closed mixed Tuesday, as Omicron worries snuffed out market optimism.
The S&P 500 swung between small gains and losses, ultimately closing 0.1% lower at 4,786.36 amid decreased liquidity in the last days of the year.
The Dow Jones Industrial Average ticked up 95.83 points or 0.3%, while the Nasdaq Composite fell 0.6% to close at 15,781.72.
While cutting quarantine times is bullish for investors and prompting market participants to look beyond the Omicron surge, analysts say that it also risks allowing the coronavirus to mutate, spread and disrupt economies.
Meanwhile, some 85% of active US stock funds were on pace to underperform the S&P 500 this year as of November 30, according to Morningstar Direct.
“Large-cap stocks this year have generally trounced the small-caps,” Robby Greengold, a Morningstar strategist told The Wall Street Journal.
The rest of the week is expected to be mostly quiet for investors, with trading volumes low and a light calendar of economic data and earnings releases.
12:00pm: US equities mixed midday as tech declines
US stocks were mixed midday on tech weakness as the S&P 500 seeks a 70th record-high close for 2021.
Investors, buoyed a bit by new studies that suggest the Omicron strain has a lower risk of hospitalization than other COVID-19 variants, are looking for a Santa Claus rally to close out the year.
As of noon, following a strong showing on Monday, the Dow Jones Industrial Average was up 181 points, or 0.50%, to 36,495. The S&P 500 increased 8 points, or 0.16%, to 4,798.
But the tech-heavy Nasdaq dropped 33 points, or 0.21%, to 15,839.
The biggest gainer on the day so far is Krispy Kreme Inc, up 8.5% to $17.60 a share.
9.50am: Mixed beginnings
US blue chips pushed ahead at the open on Tuesday continuing a rally at the end of another roller-coaster year, albeit squeezed higher in low liquidity.
In early trading, the Dow Jones Industrial Average took on 134 points, or 0.4% at 36,436, while the S&P 500 rose 0.1% having hit another record close on Monday.
But the Nasdaq Composite eased back 0.1% as investors took some tech profits.
On the data front, the S&P CoreLogic Case-Shiller National Home Price Index rose 19.1% in the year that ended in October, down from a 19.7% annual rate the prior month.
The Case-Shiller 10-city index gained 17.1% over the year ended in October, compared with a 17.9% increase in September.
The 20-city index rose 18.4%, after an annual gain of 19.1% in September. Economists surveyed by The Wall Street Journal had expected the 20-city index to gain 18.6%.
6.55am: Gains expected again
US stocks are expected to open higher on Tuesday, extending the post-Christmas advance which saw another record close for the S&P 500 index in the previous session, albeit in low volumes as 2021 draws to a close.
Futures for the Dow Jones Industrial Average rose 0.3%, those for the S&P 500 also gained 0.3%, and contracts for the tech-laden Nasdaq-100 added 0.5%.
Investors took some heart after the Centers for Disease Control and Prevention reduced the recommended isolation period for some people who test positive for coronavirus (COVID-19) to try to minimize disruption to the economy.
Markets have been roiled by the spread of the Omicron COVID-19 variant in recent weeks as governments around the world have imposed restrictions to try to curb infections, although some recent studies have suggested that the variant might result in milder illness with lower risk of hospitalization.
Naeem Aslam, chief market analyst at AvaTrade.com commented: "Various studies have shown that the Omicron variant is much less severe than its Delta counterpart, and cases of the new strain are less likely to require hospitalization.
"This update has been interpreted by the market as an indication that the Omicron variant will likely not impede economic growth in the coming months, which is a positive for global financial markets."
On the data front, the latest S&P CoreLogic Case-Shiller National Home Price Index is due for release at 9.00am ET today, with economists expecting a rise for the year that ended in October driven by a limited supply of homes.
In pre-market trading on Tuesday, several major technology stocks moved higher, with Tesla adding 1.2% and Apple rising 0.4%, pushing its market capitalization closer to $3 trillion.
Among company news, egg producer Cal-Maine Foods (NASDAQ:CALM) is expected to post its results after the market close today.