S&P 500 inches closer to record high as Omicron fears ease

S&P 500 inches closer to record high as Omicron fears ease
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NEW YORK (Dec 23): Wall Street's main indexes rose for a third straight session on Thursday after early data suggested that the Omicron variant of the coronavirus was less severe than feared, lifting the mood ahead of Christmas break.

The S&P 500 was within striking distance of its intraday record high hit on Nov 22, riding on broad-based gains and a boost from travel-related stocks, which are highly sensitive to pandemic-related developments.

Casino operators Melco Resorts & Entertainment Ltd, Wynn Resorts and MGM Resorts rose between 1% and 7%, while the S&P 1500 airlines index advanced 0.8%.

Vaccine makers AstraZeneca and Novavax said their shots protected against Omicron as UK data suggested it may cause proportionally fewer hospital cases than the Delta variant, though public health experts warned the battle against COVID-19 was far from over.

Additionally, the US Food and Drug Administration authorized Merck & Co's antiviral pill for Covid-19, after giving the go-ahead to a similar treatment from Pfizer Inc a day earlier.

"Last holiday season, there was an equal spike in cases, but now we have so many more weapons in our arsenal to fight Covid-19 and that is a very different outlook," said Christopher Grisanti, chief equity strategist at MAI Capital Management in New York.

"The Merck approval is a good example of that."

As investors head into the new year following what has been a bumper year for stock markets, the impact of the Omicron variant on the global economy is expected to be in focus.

The S&P 500 is on track for an 87% gain since the end of 2018, its best three-year performance in more than two decades.

With trading volumes thinner than usual ahead of Christmas and New Year holidays, Wall Street's main indexes looked set to wrap up a short week on an strong note. The stock market will be shuttered on Friday in observance of Christmas holiday.

At 11.39am ET, the Dow Jones Industrial Average rose 204.96 points, or 0.57%, at 35,958.85, the S&P 500 gained 33.68 points, or 0.72%, at 4,730.24, and the Nasdaq Composite added 127.60 points, or 0.82%, at 15,649.49.

All 11 major S&P 500 sector indexes were higher, with economically-sensitive industrials and financials posting the sharpest gains. The healthcare index hit an all-time high.

New York-listed shares of JD.com slumped 6.7% after the e-commerce company's largest shareholder, Tencent, said it would transfer its stake in the company worth HK$127.69 billion (US$16.37 billion) to shareholders.

Meanwhile, latest data showed the number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week, while consumer spending increased solidly, putting the economy on track for a strong finish to 2021.

Stocks have historically performed well in the last five trading days of December and the first two of January, a phenomenon known as the Santa Claus rally which has lifted equities in 56 out of 75 years since 1945, according to CFRA Research. This year, the period starts on Dec 24.

Advancing issues outnumbered decliners by a 2.66-to-1 ratio on the NYSE and by a 2.07-to-1 ratio on the Nasdaq.

The S&P index recorded 32 new 52-week highs and no new low, while the Nasdaq recorded 50 new highs and 58 new lows.