Stocks Whipsaw With Omicron Confirmed in the U.S.: Markets Wrap

(Bloomberg) — Stocks whipsawed as traders assessed the latest developments on the global spread of the omicron coronavirus strain, with the U.S. confirming its first case in California.

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In a very volatile session, the S&P 500 erased gains after rallying almost 2% earlier in the day. Trading volume was 43% above the average of the past month, according to data compiled by Bloomberg. Airlines, cruise operators and hotels tumbled.

“The accelerating volatility in the market is an indication that investors are increasingly skittish, though seasonality and fundamentals are a tailwind into year-end,” said Mark Hackett, chief of investment research at Nationwide.

South Africa said Covid-19 cases almost doubled from Tuesday, with the new strain popping up in locations from the U.K., Switzerland and Brazil. Meantime, the World Health Organization’s chief scientist noted that vaccines will likely protect against severe cases of the variant. The Biden administration’s restrictions on travel from southern Africa because of the omicron coronavirus variant will be temporary, Anthony Fauci said.

Federal Reserve Chair Jerome Powell reinforced his message that the central bank would keep inflation in check and said again that officials should consider speeding up how quickly they withdraw support. The U.S. economy grew at a modest to moderate pace through mid-November while price hikes were widespread amid supply-chain disruptions and labor shortages, the Fed said in its Beige Book survey.

Read: Government Shutdown Risk Rises as Congress Stalls on Stopgap

Confidence among chief executive officers of large U.S. companies jumped to an all-time high as expectations for hiring, capital investment and sales all improve. A measure of manufacturing rose in November, while separate data suggested employers continued to chip away at filling a near-record number of open positions.

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Some corporate highlights:

Moderna Inc. shares fell after the pharmaceutical company lost an appeal of a patent ruling involving a rival’s drug-delivery technology, which could make its Covid-19 vaccine vulnerable to infringement suits.
Salesforce.com Inc. slumped after the top maker of cloud-based customer-relations software gave revenue and profit forecasts that fell short of estimates.
T-Mobile US Inc. planned to sell bonds in a deal that could help the mobile-phone company buy more wireless spectrum as carriers race to build their 5G networks.

Key events to watch this week:

OPEC, allies may re-evaluate plans for reviving oil supplies, Thursday
U.S. initial jobless claims, Thursday
U.S. jobs report, factory orders, durable goods on Friday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

The S&P 500 fell 0.2% as of 3:16 p.m. New York time
The Nasdaq 100 fell 0.6%
The Dow Jones Industrial Average fell 0.4%
The MSCI World index rose 0.3%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro fell 0.2% to $1.1316
The British pound fell 0.2% to $1.3274
The Japanese yen rose 0.3% to 112.81 per dollar

Bonds

The yield on 10-year Treasuries declined two basis points to 1.42%
Germany’s 10-year yield was little changed at -0.34%
Britain’s 10-year yield advanced one basis point to 0.82%

Commodities

West Texas Intermediate crude fell 1.1% to $65.43 a barrel
Gold futures rose 0.3% to $1,781 an ounce