Wall Street Opens Higher as Market Digests Omicron Risks; Dow up 390 Pts

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Wall Street Opens Higher as Market Digests Omicron Risks; Dow up 390 Pts

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened higher on Thursday, as investors tempered their concerns about the new Omicron strain of Covid-19 against the backdrop of another set of healthy labor market data.

A senior Pfizer (NYSE: PFE ) executive said earlier that his company doesn't foresee a big drop in the effectiveness of its current vaccine against the new variant, while GlaxoSmithKline (NYSE: GSK ) said early trial data said its experimental antiviral treatment Sotrovimab appeared effective against all known variants of the disease, including Omicron. GSK ADRs rose 1.0% while shares in its research partner Vir Biotechnology (NASDAQ: VIR ) consolidated, having risen 50% in the last week. 

By 9:50 AM ET (1450 GMT), the Dow Jones Industrial Average was up 393 points, or 1.2% at 34,415 points its cyclical-heavy composition helping it to outperform the other major indices after a couple of days of underperformance. The S&P 500 was up 1.0% and the Nasdaq Composite was up 0.7%.

Despite the broadly positive tone, the standout mover was falling. Apple (NASDAQ: AAPL ) stock fell as much as 4% before paring losses to be down only 2.1%, after a newswire report that said demand for its new generation of iPhones is weakening due to limited availability and high prices. Despite partial success in diversifying its business into services in recent years, the iPhone remains central to Apple's business outlook.

Earlier, the Labor Department had said that the number of initial jobless claims last week had risen to 222,000, still the second-lowest number since the pandemic began in earnest and below analysts' forecasts for 240,000. The previous week's initial claims were also revised down by another 5,000. There was more supportive news at the margins from the political sphere, where Republican and Democratic lawmakers reached a tentative deal to fund the U.S. government through mid-February, averting the (largely phantom) threat of a government shutdown this weekend.

Consumer-focused stocks in particular were helped by news out of the monthly meeting of OPEC and partners led by Russia, which defied many expectations by sticking to their plan of raising oil output by another 400,000 barrels a day in January. The actual increase is likely to be less, given that OPEC has missed its target for raising output for the last few months due to various above-ground problems, many of them related to past under-investment. 

In a departure from recent practice, however, OPEC said that its meeting would remain in session, giving it the freedom to revise its decision at any time over the next month. The decisions represent a balancing act between those who are concerned about the risk of new Omicron-driven mobility restrictions to global oil demand and those more concerned by prices overheating as the world emerges - however irregularly - from the pandemic.

Elsewhere, business software providers had another solid start, with Snowflake (NYSE: SNOW ) stock rising 11.4% after an earnings report bolstered by an international expansion drive. Crowdstrike (NASDAQ: CRWD ) stock rose 2.3% after the cybersecurity company attracted more customers than expected in the last three months, while Splunk (NASDAQ: SPLK ) stock, which had cratered by more than one-third in the last three weeks, steadied after its quarterly update, rising 3.4%.

Boeing (NYSE: BA ) stock rose 3.6% after national aviation regulators cleared its 737 MAX aircraft to fly in China after a hiatus of over two years.

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