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U.S. Stocks Move Into 'Santa Claus Rally' As Omicron Concerns Fade; Inflation Data In Focus

Wall Street looks poised for a classic 'Santa Claus' rally Thursday, where stocks generally rise over the final five trading days over Christmas and the the first two sessions of the following year.

U.S. powered higher Thursday, setting up the potential for a three-day rally heading into the Christmas break, as investors look past Omicron risks following a raft of data suggesting the rapidly-spreading variant carries milder symptoms than is predecessors.

The Food & Drug Administration's decision to approve Pfizer's  (PFE) - Get Pfizer Inc. Report Covid antiviral treatment -- which has also shown to be highly effective against Omicron -- is also adding to investor confidence that global growth won't be derailed by the virus, which is doubling its infection rate every one to three days.

Novavax  (NVAX) - Get Novavax, Inc. Report, as well, published promising data from a late-stage trial of its Covid vaccine candidate, which included solid Omicron efficacy, and the FDA also gave the nod to Merck's  (MRK) - Get Merck & Co., Inc. Report antiviral pill molnupiravir prior to the start of trading, adding another arrow to the U.S. government's quiver in fighting the impact of surging infections in the world's biggest economy. 

A stronger-than-expected reading of consumer confidence yesterday, alongside lingering bets that President Joe Biden's $1.75 trillion 'Build Back Better' spending bill can find support despite Senator Joe Manchin's refusal, is also providing market support over one of the few final trading days of 2021.

Faster-than-expected inflation data, in the form of the Federal Reserve's preferred gauge -- the core PCE Index -- could clip stocks later today, with the headline reading surging to a 1982 of 5.7% and the core tally coming in at 4.7%.

Weekly jobless claims, meanwhile, were unchanged at 205,000 for the period ending on December 18, with the four-week average inching higher, to 206,250. Durable goods orders impressed, with a headline reading of +2.5% for November when compared to last year.

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On Wall Street, the Dow Jones Industrial Average was marked 230 points higher in the opening hour of trading while the S&P 500 gained 26 points, setting up a so-called 'Santa Claus' rally, where stocks generally rise over the final five trading days over Christmas and the the first two sessions of the following year.

The Nasdaq Composite edged 45 points into the green gain as benchmark 10-year Treasury note yields ease to 1.462% in overnight trading.

U.S.-listed shares of China-based companies are also likely to be in focus Thursday, after Tencent Holdings  (TCHEY)  dumped $16.4 billion shares in e-commerce giant  (JD) - Get Inc. Report amid Beijing's broader crackdown on the tech sector.'s U.S.-listed shares were marked 9% lower in early trading, while Tencent gained 3.75%.. 

In a related story, Intel Corp.  (INTC) - Get Intel Corporation Report shares edged lower in pre-market trading after the chipmaker issued a formal apology in China over its stance on sourcing products from the Uyghur region of Xinjiang.

Intel had told suppliers earlier this month not to source materials from the area, where the U.S. State Department says Muslim Uyghurs are often made to work in forced labor camps, an accusation the Beijing has repeatedly denied. The directive triggered some backlash on social media and raised the prospect of reprisal from the Chinese government.

Intel shares were marked 0.1% lower in pre-market trading to indicate an opening bell price of $50.93 each. 

In overseas trading, Europe's region-wide Stoxx 600 was marked 0.6% higher by mid-day trading Frankfurt while Asia's MSCI ex-Japan index added 0.85% heading into the end of the session  and the Nikkei 225 in Tokyo closed 0.83% higher at 28,798.37 points.