Wall Street rebounds from Omicron selloff after strong Nike, Micron results

Wall Street’s main indexes jumped more than 1.5% on Tuesday, with strength in travel and economically sensitive shares as well as in Nike and Micron Technology following their earnings, as stocks rebounded from a coronavirus-fueled rout the session before.

The rapidly spreading Omicron variant of the coronavirus has rattled stock markets around the world, triggering volatility in the final month of 2021 and leading some investors to lock in profits after a strong year for equities.

Economically sensitive groups such as energy and financials led among S&P 500 sectors on Tuesday while gains in massive technology and tech-related stocks such as Microsoft and Amazon also lifted indexes.

Travel-related stocks surged, with Carnival Corp, Las Vegas Sands and Expedia Group among the top percentage gainers on the S&P 500.

It is clearly a risk-on day,” said David Joy, chief market strategist at Ameriprise Financial in Boston. “This is clearly, at least for the day, investors saying, ‘You know what, we are going to be able to ride through this Omicron surge and come out the other side in pretty good shape.”

The Dow Jones Industrial Average rose 539.76 points, or 1.55%, to 35,471.92, the S&P 500 gained 72.79 points, or 1.59%, to 4,640.81 and the Nasdaq Composite added 300.51 points, or 2.01%, to 15,281.46.

Defensive sectors such as consumer staples and utilities that have led for most of December, lagged on Tuesday.

Nike shares rose 6% after the sports apparel company’s results beat quarterly estimates for profit and revenue, and said it was more confident of easing supply chain issues in its next fiscal year.

Micron Technology shares jumped 10% after the chip company forecast second-quarter sales and profits will beat estimates with shortages easing in 2022. The Philadelphia SE Semiconductor index rose over 2%.

General Mills shares fell 4% after the consumer staples company missed Wall Street estimates for quarterly profit. The benchmark S&P 500 has gained some 23% so far in 2021.

Some investors are wary about a tougher environment for equities as the Federal Reserve is expected to start raising interest rates next year.

“It’s good to see green going into the next year but if you just take a step back and look at the broader picture, you’re seeing financial conditions change,” said Joshua Chastant, senior investment analyst at GuideStone Capital Management.

Advancing issues outnumbered declining ones on the NYSE by a 4.72-to-1 ratio; on Nasdaq, a 2.87-to-1 ratio favored advancers. The S&P 500 posted 10 new 52-week highs and no new lows; the Nasdaq Composite recorded 21 new highs and 80 new lows.

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