NEW YORK (Reuters) -The S&P 500 notched a record-high close on Thursday, with oil prices also rising, as investors and traders were optimistic about positive economic data and discounted the impact of the Omicron coronavirus variant on the economy, even as COVID-19 case counts soar.
Stocks rose broadly on the last trading day of the week ahead of a long Christmas weekend in the United States, after data showing consumer spending rose 0.6% last month. The number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week, helping add to the gains.
Signs that Omicron is less likely to lead to hospitalization, and indications that both Merck’s and Pfizer’s COVID-19 anti-viral pills are effective against the variant, added to the festive cheer in the market.
“Today is a very calm day; it’s the relief over Omicron apparently not being as bad as we feared,” said Ryan Detrick, chief market strategist at LPL Financial. “It’s a positive sign as we head into 2022. The economic backdrop is on very strong footing.”
“The bull might have a few more tricks up his sleeve before the year ends,” Detrick added.
The Dow Jones Industrial Average rose 0.55% to 35,950.56 and the S&P 500 gained 0.62% to 4,725.79. The Nasdaq Composite added 0.85% to 15,653.37.
MSCI’s gauge of stocks across the globe gained 0.72%.
As investors pulled money out of safe-haven assets, the benchmark 10-year yield on U.S. Treasuries was up 3.5 basis points at 1.4926% in afternoon trading. The Treasury markets closed at 2 p.m. ET due to the holiday weekend.
The rise of risk-on investments ahead of Christmas, dubbed a “Santa Claus rally” by traders, also nudged gold and oil higher.
The safe-haven dollar crept higher against a basket of currencies, but its gains were capped by the risk-on sentiment supporting the Australian dollar and British pound.
U.S. stocks posted a third successive day of gains as they recovered from a jolt on Monday when worries about Omicron pushed investors to safe-haven assets.
The risk of needing to stay in the hospital for patients with the new variant is 40% to 45% lower than for patients with the Delta variant, according to research by London’s Imperial College published on Wednesday.
However, experts have said that U.S. President Joe Biden’s attempts to curb the spread of Omicron by distributing free at-home rapid tests, though welcome, were too little, too late.
Oil prices extended gains on Thursday as the signs the worst effects of the Omicron variant might be containable prevailed over the threat of new travel curbs.
U.S. crude recently rose 1.37% to $73.76 per barrel and Brent was at $76.73, up 1.91% on the day.
(Reporting by Jessica DiNapoli in New York; additional reporting by Alun John and Lawrence White; Editing by Kenneth Maxwell, Ana Nicolaci da Costa, Pravin Char, Jonathan Oatis and Sonya Hepinstall)