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Retail Stocks Level Off as Cyber Monday Offsets Omicron Concerns

Macy’s, Kohl’s, Nordstrom and other retail stocks recover on Cyber Monday optimism after Friday's omicron variant scare casts a pall on Black Friday sales.

Retail stocks were relatively flat Monday as the likes of department store and clothing chain operators Macy’s  (M) , Kohl’s  (KSS) , Nordstrom  (JWN)  and others recovered after Friday's omicron variant scare that darkened Black Friday on Wall Street.

Shares of Macy's were down 0.39% at last check, while Nordstrom was down 0.85% and Kohl's was down 0.26%. U.S. apparel retailers Guess  (GES) , American Eagle Outfitters  (AEO) , Abercrombie & Fitch  (ANF) , Nike  (NKE) , Gap  (GPS)  and Lululemon  (LULU)  were all higher at the market open.

Shares of U.S. department-store operators slid in thin, post-Thanksgiving shortened trading Friday as the detection of a new coronavirus variant called omicron compounded concerns stemming from reports of low in-store visits as well as thin holiday season inventories -- even amid reports of strong online buying.

Gregory J. Hahn, chief investment officer at Winthrop Capital Management, told TheStreet on Friday that he expects the ongoing holiday shopping season in the U.S. to continue without any dramatic disruptions. 

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"The consumer is armed with cash and ready to spend. While going to a mall in the U.S. may not be everyone’s first choice, online shopping is an alternative," Hahn said. 

The knee-jerk reaction to the new omicron variant, which received its name from the World Health Organization on Saturday, appeared to abate on Monday alongside a broader recovery in stocks as investors digested more detail about the variant's lethality.

Dr. Angelique Coetzee, the South African doctor who first raised the alarm over the new strain, told the BBC on Sunday that the patients who have been confirmed to have the new omicron variant so far appears to have had “extremely mild symptoms.”

Early reports that symptoms could be milder than first anticipated added to market optimism, however, while investors look to any impact the outbreak may have on central bank policy as Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee on Tuesday. 

The WHO has said it will take weeks to understand how the variant may affect diagnostics, therapeutics and vaccines.

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