Stock Market Today: Stocks Rise on Encouraging Virus Studies

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Stocks traded higher Thursday, as studies on the Omicron coronavirus variant revealed infected people were at less risk of being hospitalized. Stronger U.S. economic data also buoyed markets ahead of the Christmas holiday, and set major stock indexes on track to erase Monday’s steep drop and close the holiday-shortened week in the green.

The

Dow Jones Industrial Average
was up 222 points, or 0.6%, in midday trading Thursday. The

S&P 500
rose 0.7% to 4,729, above the index’s all-time closing high of 4,712, while the

Nasdaq Composite
gained 0.9%.

The latest Omicron headlines were net positive. A study from the University of Edinburgh and another from the Imperial College London found that while the Omicron variant was more infectious, it was less severe. Also, researchers at South Africa’s National Institute for Communicable Diseases found people were 70% to 80% less likely to be hospitalized if infected with Omicron.

Meanwhile, the Food and Drug Administration on Wednesday authorized the Covid-19 antiviral pill from 

Pfizer

(ticker: PFE), adding a new weapon against the pandemic. On Thursday morning, the agency gave a thumbs up to another oral treatment from

Merck

(MRK).

There’s still plenty to keep investors up at night, but a year-end rally has unfolded in the past few days nonetheless.

“If the U.S. was not battling the Omicron variant, U.S. stocks would be dancing higher as the Santa Claus rally would have kept the climb going into uncharted territory,” wrote Edward Moya, senior market analyst, the Americas, at currency brokerage Oanda. “It is too early to say for sure if we will get a Santa Claus rally, but given all the short-term risks of Fed tightening, Chinese weakness, fiscal support uncertainty and Covid, Wall Street is not complaining as the S&P 500 is [at record highs.]”

Thursday morning was a busy one for economic data releases, most of which were collected before the Omicron wave. U.S. jobless claims for the week ended Dec. 18 were 205,000, about equal to the prior week and the average over the past four weeks, according to the Labor Department.

The Bureau of Economic Analysis reported personal income and consumption expenditures for November on Thursday morning. Consumer earnings rose 0.4% and spending climbed 0.6%. Economists’ consensus had been for increases of 0.6% and 0.5%, respectively.

The Federal Reserve’s preferred measure of inflation, the core personal consumption expenditure (PCE) price index, rose 0.5% in November for a year-over-year increase of 4.7%. That compares with a 4.2% annual rise in October and economists’ 4.5% prediction for November.

The central bank’s next policy-making meeting is Jan. 25-26, meaning there will be another round of employment and inflation data for officials to parse through between now and then.

Finally on Thursday morning, the Census Bureau released the durable goods report for November, which helps to provide a window into investment spending in the economy. New orders rose 2.5%, to $268.3 billion last month, versus a 2.1% average forecast.

Oil prices rose on Thursday, reflecting the same economic optimism pushing stocks higher. The price of West Texas Intermediate crude oil ticked up 0.2%, to $72.90 a barrel.

U.S. Treasury yields also climbed on Thursday, with the closely watched 10-year Treasury note yield up to 1.49%. Yields rise when prices decline, signifying more risk appetite from investors.

Stocks rose Wednesday for a second straight session, getting a boost from rising U.S. consumer confidence. Also lifting sentiment were gains in home sales and data that showed the U.S. economy rose at a rate of 2.3% in the third quarter, higher than the previous estimate.

Stock markets will be closed Friday because the Christmas Day holiday falls on a Saturday.

Here are seven stocks on the move Thursday:  

JD.com

(JD) stock dropped 6% after

Tencent

(0700.HK) said it would distribute its stake in the Chinese e-commerce firm to shareholders. That will come in the form of a $16.4 billion dividend. Tencent’s Hong Kong-listed shares rose 4.2% Thursday.

U.S.-listed shares of

AstraZeneca

(AZN) fell 0.7% following a study at the University of Oxford that found a third dose of the company’s Covid-19vaccine was effective against the Omicron variant.

Novavax

(NVAX) fell 3% after early data showed its two-dose vaccine booster produced an immune response to the Omicron variant.

Macau gambling and casino operators rose, as investors expressed optimism about a regulatory review of the city’s gaming sector.

Las Vegas Sands

(LVS) stock climbed 2.8%,

Wynn Resorts

(WYNN) gained 2.6%, and

MGM Resorts International

(MGM) added 1.1%.

Write to Joe Woelfel at joseph.woelfel@barrons.com