It was a second day of the Omicron rush as new confidence in overcoming fears that the new variant will have an impact on the economy pushed all the indexes higher again as investors concluded “It may not have as much of an impact.”  Further validation came from Biden’s statement that there will be no new lockdowns.  Also helping were reports that the White House was entering into new negotiations with Manchin so the big bill that Wall Street and industry wants may not be dead after all.  There is still caution though that the traditional “Santa Claus” rally that happens most every year may be less pronounced this time around.  Being so close to the holiday, volume too was less pronounced at 8.6 billion. 

Wed  December 22, 2021  6:08 PM

U.S. stocks close up as Omicron fears fall; 'Santa Claus rally' may be muted

By Jessica DiNapoli

DJ: 35,492.70  +560.40       NAS: 15,341.09  +360.14        S&P: 4,649.23  +81.21     12/21

DJ: 35,753.89  +261.19       NAS: 15,521.89  +180.80        S&P: 4,696.56  +47.33     12/22

NEW YORK, Dec 22 (Reuters) - U.S. stock indexes closed broadly higher on Wednesday after investors cheered positive economic data and the White House said it was resuming talks on a massive social spending and climate change bill with a holdout senator.  The market gained throughout the trading session, overcoming fears about the Omicron COVID-19 variant, and was pushed upward by improving consumer confidence and gross domestic product growth. The positive swing continued Tuesday's trend, when stocks recouped losses.

"With COVID fears, there’s not as much worry as before," said Anu Gaggar, global investment strategist for Commonwealth Financial Network. "It may not have as much of an impact on the economy. (U.S. President Joe) Biden has said we won’t go back to lockdown."

The White House said on Wednesday that it would continue talks with Senator Joe Manchin, who delivered what appeared to be a fatal blow to Biden's Build Back Better bill over the weekend by saying he would not support it. read more  Gaggar added that volatility in December has been much higher than usually seen, and that her conviction is that the "Santa Claus rally is slightly lower this year.”   The so-called "Santa Claus rally" is the last five trading days of the year and the first two of the next year, when stocks often are higher. According to an article from LPL Financial, if Santa does not come, it could portend a bear market.  Riskier currencies such as the Australian dollar and the euro recovered against the U.S. dollar on Tuesday, while U.S. Treasury traders discounted the threat of long-term inflation as the yield curve flattened. read more 

The Dow Jones Industrial Average (.DJI) rose 261.19 points, or 0.74%, to 35,753.89, the S&P 500 (.SPX) gained 47.33 points, or 1.02%, to 4,696.56 and the Nasdaq Composite (.IXIC) added 180.81 points, or 1.18%, to 15,521.89.  All major S&P 500 sectors gained, with the consumer discretionary group (.SPLRCD) up 1.7% and technology (.SPLRCT) up 1.3%.

MSCI's gauge of stocks across the globe (.MIWD00000PUS) gained 0.94%.  Oil prices climbed as fears of tight supply and drawdowns in the United States offset concerns about COVID-19 dampening demand. U.S. crude recently rose 2.66% to $73.01 per barrel and Brent was at $75.56, up 2.14% on the day. read more

Little is known about the severity or transmissibility of the Omicron variant, but top U.S. infectious disease expert Anthony Fauci said on Wednesday that holiday gatherings of over 40 people are not safe even for people who are vaccinated and got a booster dose. read more  Meanwhile, Biden warned Americans about the risks of being unvaccinated - saying it "can be the difference between life and death" - and brought military personnel to support overwhelmed hospitals. read more  The United States also authorized Pfizer Inc's (PFE.N) antiviral COVID-19 pill for at-risk people aged 12 and above. read more

Currency market moves were generally muted as trading slowed before the Christmas holidays. The dollar index fell 0.375%.  Elsewhere, cryptocurrencies slipped slightly, with bitcoin roughly flat at $48,937.70, still well below the all-time high of $69,000 hit in November. 

Advancing issues outnumbered declining ones on the NYSE by a 3.17-to-1 ratio; on Nasdaq, a 1.65-to-1 ratio favored advancers.  The S&P 500 posted 15 new 52-week highs and no new lows; the Nasdaq Composite recorded 35 new highs and 99 new lows.

About 8.6 billion shares changed hands in U.S. exchanges, below the 11.8 billion daily average over the last 20 sessions.