Stocks End Mixed as Omicron Fuels More Volatility
5:05 pm Wednesday, December 01st, 2021
U.S. stocks seesawed in a choppy trading session as investors attempted to shake off worries about the Omicron variant and the unwinding of Federal Reserve stimulus.
All 11 S&P 500 sectors are trading higher with gains ranging from 0.4% (communication services) to 1.6% (energy). Value stocks and growth stocks are rising together with the performance edge belonging to the value stocks. Advancing issues outpace declining issues by better than a 2:1 margin at the NYSE.
Investors seem to be appreciating yesterday’s reports that current vaccines are likely to protect against severe disease while also recognizing that interest rates are apt to remain low, even if the Fed hikes rates next year. Dip-buying efforts have drawn additional support from new inflows on the first day of the month and decent economic data.
Specifying the data, the ADP Employment Change report estimated 534,000 jobs were added to private-sector payrolls in November (consensus 515,000), and the ISM Manufacturing Index for November checked in at 61.1% (consensus 61.0%) for its 18th straight month above 50.0% (expansion).
The rebound effort, though, hasn’t quite reversed yesterday’s moves: the S&P 500 is still trading below yesterday’s high (4646), the 10-yr yield is up just two basis points to 1.46% after falling nine basis points yesterday, and WTI crude futures are up just 1% ($67.03, +0.85, +1.3%) after falling 5% yesterday.
Salesforce.com (CRM) was a notable drag with a 7.6% decline after providing disappointing guidance, which has overshadowed its EPS beat. Meta Platforms (FB) was down 2% on no confirmed catalyst.
The 2-yr yield, meanwhile, is extending yesterday’s positive turnaround with a seven-basis-point increase to 0.59%. The 2-yr yield typically moves higher when investors expect the Fed to tighten policy in the near future. On a related note, the second day of Fed Chair Powell’s congressional testimony did not produce any market-moving headlines.
