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US stocks start higher, regaining footing after slump Friday

Markets regain footing

Stocks are opening with broad gains on Wall Street Monday as markets regain their footing following a big stumble on Friday on worries about the spread of the new variant of the coronavirus.

Signs of fear in the market also ebbed as traders regained their appetite for riskier assets.

The S&P 500 rose 1.1%, and the tech-heavy Nasdaq clawed back 1.3%. Both fell more than 2% on Friday.

Crude oil prices jumped 6.7% and bond yields climbed back.

European stocks and oil prices rebounded even as Asian markets fell further, with investors weighing the new coronavirus variant, omicron, that is being found in more countries and prompting some governments to reimpose travel controls.

Benchmarks in London, Frankfurt and Paris had gained by midday. Indexes in Shanghai, Tokyo and Hong Kong ended lower, though losses were smaller than Friday's fall, sparked by reports that the variant first spotted in South Africa appeared to spread around the globe.

On Wall Street, futures contracts for the benchmark S&P 500 index were up 0.9%. Futures for the Dow Jones Industrial Average gained 0.7%.

As health authorities scrambled to analyze the new variant, traders were clinging to hope that it would be not be any more severe than other strains of the virus.

“The potential for a less deadly form of the virus does appear to provide some respite to the risk-off sentiment dominating Friday’s trade," said Joshua Mahony, senior market analyst at IG. “However, the weeks ahead are fraught with danger for investors."

The FTSE 100 in London rose 1.2% to 7,122.61. The DAX in Frankfurt gained 0.6% to 15,352.00, and the CAC 40 in Paris advanced 0.8% to 6,797.65.

On Friday, the S&P 500 fell 2.3% for its biggest daily loss since February. The Dow lost 2.5%, while the Nasdaq Composite retreated 2.2%.

Investors sold banks, energy and airline stocks last week and shifted money into bonds and other safe haven assets.

But that pattern reversed Monday. IAG, owner of British Airways and Spanish airline Iberia, jumped 4.2%, while United Kingdom discount carrier Easyjet rose 3.9%.

In the U.S., the travel and energy sectors as well as companies expected to thrive when the pandemic loosens its grip, such as computer chip makers and hospitals, were set to lead the bounceback Monday with Wall Street’s faith in an emerging global economy seemingly reinvigorated.

But in Asia, the Nikkei 225 ended 1.6% lower at 28,283.92 after Japan announced it will bar entry by foreigners starting Tuesday.

The Shanghai Composite Index lost less than 0.1% to 3,562.70, and the Hang Seng in Hong Kong sank 0.9% to 23,852.24.

The Kospi in Seoul declined 0.9% to 2,909.32, and Sydney's S&P-ASX 200 retreated 0.5% to 7,239.80.

India's Sensex gained 0.3% to 57,260.58. New Zealand, Singapore and Bangkok fell, while Jakarta advanced.

The World Health Organization called omicron “highly transmissible," but it was unclear whether it is more dangerous than earlier variants.

Governments imposed new travel controls, fueling investor fears about possible setbacks in containing the pandemic that has killed more than 5 million people since the first cases in late 2019.

The new variant was found as far afield as Hong Kong, Belgium, Denmark, the Netherlands, Australia, Portugal and Israel. The European Union, the United States and Britain imposed curbs on travel from Africa. Israel banned entry by foreigners, and Morocco suspended all incoming flights for two weeks.

The omicron variant might complicate planning by central banks that are deciding when and how to withdraw stimulus that is boosting stock prices.

Investors were rattled last week when notes from the Federal Reserve's October meeting showed officials said they were ready to consider raising interest rates sooner than planned in response to higher inflation. The Fed previously said its first rate hike might not come until late 2022.

In energy markets, benchmark U.S. crude surged $3.41 to $71.45 per barrel in electronic trading on the New York Mercantile Exchange, rebounding from Friday's $10.24 plunge. Brent crude jumped $3.26 to $75.98 per barrel in London.



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