US stocks start higher and bounce back after Friday’s slump

BEIJING – Shares on Wall Street rose broadly on Monday as markets regained their footing after a major stumble on Friday over concerns about the spread of the new strain of the coronavirus.

The S&P 500 rose 1% as of 9:44 a.m. Eastern. The benchmark index fell 2.3% on Friday, its worst day since February. The Dow Jones Industrial Average rose 192 points, or 0.6%, to 35,073 and the Nasdaq rose 1.2%.

Technology companies posted some of the biggest gains. Apple rose 2.2% and Microsoft rose 2.4%. A wide range of retailers and other businesses that rely on consumer spending also posted solid gains. Amazon was up 1.3% and Nike was up 1.4%.

Travel-related stocks, which suffered on Friday, gained some ground. Marriott was up 3.2% and Expedia was up 2.7%. The price of crude oil in the US rose by 5.7%.

Like equities, the bond market and other corners of Wall Street held up after Friday’s reflex to run to safety and away from risky assets. With vaccines in hand, the world may be in a better position to weather this latest potential wave. In addition, Friday’s market movements may have been exacerbated by many professional traders taking a day off after Thanksgiving.

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“So once the initial shock wears off a bit, traders could see opportunities and come to terms with the possibility of some near-term volatility associated with a potential new wave,” Chris Larkin, trading director at E-Trade Financial, said in a statement.

The 10-year Treasury yield climbed to 1.55% from 1.49% at the end of Friday, recovering nearly half of that day’s steep decline. It tends to rise and fall with expectations for the strength of the economy and for inflation.

Yields on the two-year Treasury, meanwhile, rose as traders reconsidered Friday’s guesses that omicron would prompt the Federal Reserve to delay rate hikes. It rose to 0.54% from 0.50% at the end of Friday.

Investors are now counting on a 67% probability that the Fed will raise interest rates from the near-zero lows in mid-June. On Friday, when ommicron concerns raised the question of whether the economy will need more help from low interest rates, investors narrowed that probability to 62%.

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Despite the reversal from Friday for yields and other parts of the market, they are still below where they were before omicron concerns blew through the markets.

Consider the VIX, an index that measures how concerned investors are about the impending declines in the S&P 500. It dropped more than 14% to 24.44, but it’s still well above its pre-Thanksgiving level at 6:58 p.m. .

The broader market has been gaining ground since early 2021, when vaccines were rolled out in an effort to fight the virus pandemic that stunned the global economy in 2020. Much of the investor concern has focused on rising inflation that could potentially contract what has been a solid recovery. COVID-19 has remained an ongoing concern.

A wave of cases of the delta variant hampered consumer spending and worried investors over the summer. The latest threat from COVD-19 comes from the ommicron variant, which was first discovered in South Africa and appeared to be spreading around the world. The European Union and the UK both announced travel restrictions from southern Africa on Friday. The US has also imposed travel restrictions on those coming from South Africa, as well as seven other African countries.

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The threat of another wave of cases threatens the global economy, just as people plan to travel for the holidays and businesses depend on holiday shoppers. It can also complicate planning for central banks deciding when and how to withdraw stimulus that has helped keep interest rates low and help stocks.

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AP Business Writer Stan Choe contributed.