Stocks closed higher Monday, rebounding from Friday's losses, as President Joe Biden said the government would not immediately resort to lockdowns in its response to the Omicron variant of Covid-19.
The Dow Jones Industrial Average finished up 263 points, or 0.68%, to 35,135, while the S&P 500 advanced 1.32%, and the tech-heavy Nasdaq surged 1.9%.
Biden said Monday that the variant is “a cause for concern, not a cause for panic," according to the New York Times.
He said he would outline “a strategy for how we are going to fight Covid this winter, not with shutdowns or with lockdowns, but with more widespread vaccinations, boosters, testing and more.”
The World Health Organization has named Omicron a "variant of concern" and governments around the world are closing borders and issuing new travel and business restrictions to tame its spread.
Early reports that symptoms could be milder than first anticipated added to market optimism, 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.
Chris Larkin, managing director of trading at E*Trade Financial, said "traders got a harsh wakeup call on Friday amid the rise of Omicron, suggesting that COVID still holds a powerful psychological grip on the markets."
"That said, some of the exaggerated moves could be attributed to the fact that volumes were light after the holiday," he said. "So as the initial shock wears off a bit, traders could be eyeing opportunities and coming to terms with the possibility of some short-term volatility associated with a potential new wave."
Larkin added that while Covid continues to be a serious threat, "we’re in a very different place than we were at the start of the pandemic in terms of medical advances and the strength of our economy."
In company news, Moderna (MRNA) - Get Moderna, Inc. Report was the big winner with shares surging 11.8% after the drugmaker said it could develop a new vaccine capable of combating the new Omicron variant early in the new year.
Pfizer (PFE) - Get Pfizer Inc. Report was rising earlier in the session, but closed down nearly 3% after CEO Albert Bourla confirmed the company's plan to boost production if its Covid antiviral pill in order to combat the impact of the Omicron variant.
Dorsey will remain on the board until at least 2022, the company said, with Bret Taylor becoming independent chairman. Chief technology officer Parag Agrawal was named as his replacement.
Don’t miss our Cyber Monday 24-hour sale: Sign up for our Action Alerts PLUS investment club and get trading strategies and investing ideas from Real Money’s expert contributors for free.