Stocks rise as Wall Street’s wild omicron ride continues

The latest move in Wall Street’s jolting roller-coaster ride is back up, as stocks, oil and bond yields climb in Wednesday morning trading to recover much of their sharp losses from the day before.

The S&P 500 was 1.5% higher following some better-than-expected readings on the U.S. economy. It’s the latest dizzying move for Wall Street’s benchmark, which sank 2.3% on Friday for its worst loss since February, only to then rise 1.3% and then fall 1.9%.

The wild movements are partly the result of investors struggling to handicap how much damage the newest coronavirus variant will do to the economy. With few concrete answers about omicron, investors have been groping and sending markets back and forth as minor clues dribble out.

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Another weight dropped on Wall Street Tuesday when the head of the Federal Reserve said that it may halt its immense support for financial markets sooner than expected given the persistently high inflation sweeping the world.

But since climbing out of its early 2020 collapse caused by the first wave of COVID-19, one hallmark of the stock market’s powerful run has been the continued willingness by bargain-hunting investors to buy following any dip in prices. That lasting habit has helped the S&P 500 set 66 all-time highs so far in 2021, the second-most on record for a year, according to S&P Dow Jones Indices.

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It also helped the Dow Jones Industrial Average to rise 358 points, or 1%, to 34,841, as of 10:09 a.m. Eastern time. The Nasdaq composite was 1.5% higher.

Longer-term Treasury yields also recovered some of their sharp drops from the day before triggered by worries about slowing economic growth.

The yield on the 10-year Treasury rose to 1.49% from 1.44% late Tuesday, when it fell from 1.52%.

Some better-than-expected data on the economy helped. A report from the Institute for Supply Management showed that growth in the U.S. manufacturing sector accelerated a touch faster last month than economists expected.

A separate report from payroll processor ADP said that non-government employers hired more people in November than economists expected. That could raise expectations for Friday’s more comprehensive jobs report from the U.S. government, though the ADP report doesn’t have a perfect track record predicting it.

A stronger economy would burn more fuel, and crude oil prices regained some of their sharp recent losses. Benchmark U.S. crude rose 3% to $68.18 per barrel after briefly dropping below $65 the day before. Brent crude, the international standard, rose 2.9%.

Stocks also rose across Europe and Asia amid the uncertainty about how powerful omicron’s punch will be.

Japan’s Nikkei 225 rose 0.4% even as the country further tightened restrictions by asking international airlines to stop taking new reservations for all flights heading there until the end of the year.

South Korea’s Kospi jumped 2.1%, while Germany’s DAX returned 1.9%.

A measure of fear on Wall Street also eased, falling 13%. But the VIX, which shows how worried investors are bout upcoming drops for the S&P 500, is still well above where it was before omicron walloped markets worldwide after Thanksgiving.