Tech stocks finish higher in broad equity rally

The last five trading days of the year and the first two trading days of the new year make up the “Santa Claus Rally” in trading knowledge, as described in “Stock Trader’s Almanac”. It’s not a big rally, with an average rise of about 1.3%, but it’s consistent and shows up about 80% of the time.

That holiday spirit joins a growing perception that the risks posed by the Omicron variant of Covid-19 may not be as severe as initially feared, which is a relief for investors, said Jason Pride, the chief investment officer of private wealth at asset manager. Glenmede. “I think the market is taking note of what the previous risk was, which is basically being reduced,” he said.

Markets slumped in recent weeks on concerns that the rapid spread of the Omicron variant could harm the economy, as countries have taken several measures to curb its spread. Some investors now expect Omicron to be mitigated by vaccines and the introduction of booster shots in some countries.

“Everything seems serious but manageable. Anything that changes that could likely have a big impact,” said Luca Paolini, chief strategist at Pictet Asset Management.

Market movements can be amplified during the holiday season because of a lack of liquidity or how easy it is for buyers and sellers to find each other. With many traders turned off, the prices at which people want to buy and sell can be higher or lower because there are fewer counterparties.

“We are in the sort of this Christmas trading series, but low liquidity magnifies any potential shock,” added Mr Paolini.

However, some businesses were still affected by the pandemic. Flight cancellations disrupted the Christmas weekend for many travelers as Covid-19 had left airlines short of staff to manage busy schedules over the holidays. United Airlines Holdings fell 0.7% to $44.58 and American Airlines Group lost 0.5% to $18.17.

GoDaddy shares added 8.4% to $82.35 after The Wall Street Journal reported that activist investor Starboard Value has a significant stake in the domain registrar and plans to push it to improve performance.

Meanwhile, investors kept an eye on Apple‘s

stocks, waiting to see if the company’s market cap would hit $3 trillion. While the stock closed 2.3% at $180.33, that was below the $182,856 it will need to bring its market cap to $3 trillion. Apple would be the first company in history to receive such a rich valuation.

The profit gave a boost to the tech sector. Other tech gainers were Microsoft,

Up 2.3% to $342.45, Nvidia,

up 4.4% to $309.45 and Cisco,

up 1.8% to $63.42.

Electric car maker Tesla,

trading in the consumer goods group climbed 2.5% to $1,093.94.

In currency terms, the Turkish lira fell 7.3% against the dollar. The lira, one of the worst performing emerging market currencies this year, made up for some losses last week after the country’s president announced a bailout to encourage Turks to put their money back into the lira. Foreign investors are waiting to see if the plan marks a bigger turnaround in its weakness or if broader concerns about high inflation cause it to fall in value again.

In the bond markets, the yield on the benchmark 10-year government bond fell from 1.492% on Thursday to 1.480%. Yields and prices move inversely.

Commodity prices were generally higher, benefiting from expectations of a stronger economy in 2022. US crude oil futures rose 2.4% to $75.57. Wood added 4.1% and soybean futures were up 2.3%. Natural gas prices rose 8.8% on forecasts of colder weather in parts of the US, which could boost heating fuel demand.

Abroad, the pan-continental Stoxx Europe 600 rose 0.6%. The markets in the UK were closed.

In Asia, China’s Shanghai Composite closed nearly 0.1% lower. South Korea’s Kospi and Japan’s Nikkei 225 were each down 0.4%. The markets in Hong Kong and Australia were closed.

Write to Caitlin Ostroff at [email protected] and Paul Vigna at [email protected]