Stocks closed higher Monday, erasing last week's losses, as Wall Street moved beyond concerns about the spread of the omicron variant of Covid-19 and turned its attention toward key inflation data due out this week.
The Dow Jones Industrial Average finished up 646 points, or nearly 1.9%, to 35,227, while the S&P 500 rose 1.17% and the Nasdaq advanced 0.93%
Travel-related stocks Royal Caribbean Cruises (RCL) - Get Royal Caribbean Group Report, Carnival (CCL) - Get Carnival Corporation Report and American Airlines (AAL) - Get American Airlines Group, Inc. Report led the S&P.
Dr. Anthony Fauci, the nation's top infectious disease expert, said Sunday that data from South Africa, where the new variant was first discovered, indicates that omicron may induce milder symptoms than previously forecast, although its rapid spread continues to worry virologists around the world.
"With all major indexes closing in the red last week, coupled with Omicron fears on the backburner, traders are shifting back to bullishness," said Chris Larkin, managing director of trading at E*Trade financial. "So while some may be breathing a sigh of relief that the threats of the new variant were perhaps overblown, this doesn’t mean we're totally in the clear."
There’s no shortage of factors that can fuel volatility these days, Larkin said, "so staying nimble is key."
A more hawkish Federal Reserve cautioned last week that the tapering of its bond purchase plan could quicken in the face of faster inflation prospects.
Louis Navellier, chief investment officer at Navellier & Associates, said "longer-term, earnings are what matter, which are driven primarily by the consumer in the US and both remain in very good shape."
"The Fed repositioning is a good thing by giving them optionality they need to have a more credible 'put' if needed," he said, "and as the Fed takes away the punch bowl Congress should be stepping up with additional liquidity in the Build Back Better legislation."
Navellier said Friday’s Consumer Price Index report will be closely scrutinized and could possibly influence the upcoming December Federal Open Market Committee (FOMC) meeting.
Bitcoin edged higher after the world’s biggest cryptocurrency by market capitalization fell by more than $10,000 a token, or roughly 20%, since midday Friday.
In company news, Lucid Group (LCID) - Get Lucid Group, Inc. Report slumped 5.1% after the upstart luxury electric carmaker said it received a subpoena from the U.S. Securities and Exchange Commission linked to a probe into its July merger with Churchill Capital.
It's larger rival, Tesla (TSLA) - Get Tesla Inc Report was off slightly following reports that the SEC has opened a probe into the clean-energy carmaker linked to whistleblower claims of defects in its solar panels.