The Dow and S&P 500 closed at all-time highs on Wednesday on a boost from retailers including Walgreens and Nike, as investors shrugged off concerns on the spreading Omicron variant. The TSX gained more than 100 points, outperforming the major U.S. indexes as investors caught up to gains earlier this week on Wall Street when the Canadian market was closed.
The Dow has now risen six straight trading days, marking the longest streak of gains since a seven-session run from March 5 to March 15 this year.
Walgreens Boots Alliance and Nike Inc rose against the backdrop of recent reports suggesting holiday sales were strong for U.S. retailers.
Data on Wednesday showed the U.S. trade deficit in goods mushroomed to the widest ever in November as imports of consumer goods shot to a record, as the coronavirus pandemic has limited spending by Americans on services.
Some early studies pointing to a reduced risk of hospitalization in Omicron cases have eased some investors concerns over the travel disruptions and powered the S&P 500 to record highs this week.
“The market started to recognize that the Omicron variant was in a strange way good news, because it will burn itself out more rapidly because it’s easily transmissible, but it’s less likely to overwhelm hospitals,” said Jay Hatfield, founder and chief executive of Infrastructure Capital Management in New York. Still, he said Omicron arguably is going to be a headwind for at least the next month.
Meanwhile, the S&P 1500 airlines index dipped. Delta Air Lines and Alaska Air Group canceled hundreds of flights again on Tuesday as the daily tally of infections in the United States surged.
Two of the 11 major S&P sector indexes declined, the energy index and the consumer services sector, are in the red.
Typically, the final five trading days of the year and the first two of the subsequent year are seasonally strong for U.S. stocks, known as the “Santa Claus Rally.” However, market participants warned against reading too much into daily moves as the holiday season tends to record some of the lowest volume turnovers that can cause exaggerated price action.
According to preliminary data, the S&P 500 gained 6.59 points, or 0.14%, to end at 4,792.94 points, while the Nasdaq Composite lost 16.15 points, or 0.10%, to 15,765.57. The Dow Jones Industrial Average rose 90.95 points, or 0.25%, to 36,491.04.
The S&P 500 dipped on Tuesday in the lowest trading volume session of 2021, snapping a four-day winning streak.
As 2021 draws to a close, the main U.S. stock indexes are on pace for their third straight year of stunning annual returns, boosted by historic fiscal and monetary stimulus. The S&P 500 is looking at its strongest three-year performance since 1999.
The focus next year will shift to the U.S. Federal Reserve’s path of interest rate hikes amid a surge in prices caused by supply chain bottlenecks and a strong economic rebound.
Unofficially, the S&P/TSX Composite Index closed up 114.97 points, or 0.54%, to 21,344.65. The real estate, financials, and energy sectors all rose more than 1%. Cannabis stocks were out of favour, however, with many - including Canopy Growth - posting losses of at least 10%.
Reuters, Globe staff
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