U.S. stocks rose in early trading Monday as the few investors staying on Wall Street were looking to capitalize during a traditionally bullish week.
The S&P 500 rose 0.5% after the index hit its 68th record close of 2021 Thursday. U.S. markets were closed Friday for the holiday. The tech-focused Nasdaq Composite Index jumped 0.6%, and the Dow Jones Industrial Average added 0.3%.
The last five trading days of the year and the first two trading days of the new year comprise the “Santa Claus Rally” in trading lore, as detailed in the Stock Trader’s Almanac. It’s not a big rally, on average adding about 1.3%, but it’s consistent, showing up about 80% of the time.
This year could be different, though. Investors are braced for higher volatility over the holiday season. Concerns over the rapid spread of the Omicron variant of Covid-19 and the economic impact of measures countries may take to stem its spread have weighed on markets in recent weeks. Some investors expect Omicron will be mitigated by vaccines and the rollout of booster shots in some nations.
A trader at the NYSE on the last day of trading before Christmas.
Photo:
ANDREW KELLY/REUTERS
“Everything seems to be serious but manageable. Anything that changes that, this could probably make a big impact,” said
Luca Paolini,
chief strategist at Pictet Asset Management.
Market moves can be amplified during the holiday season due to a lack of liquidity, or how readily buyers and sellers can find each other. With many traders off, prices people are willing to buy and sell at may be higher or lower because there are fewer counterparties.
“We are in kind of this Christmas trading range, but low liquidity makes any potential shock bigger,” Mr. Paolini added.
Shares of airline companies moved lower. Flight cancellations marred Christmas weekend for many travelers, as Covid-19 left carriers short-staffed to operate busy schedules over the holiday.
United Airlines Holdings
declined 2.1% and
American Airlines Group
shed 2.4%.
GoDaddy shares added 6.2% after The Wall Street Journal reported that activist investor Starboard Value has a sizable stake in the domain registrar and plans to push it to boost its performance.
In currencies, the Turkish lira fell 4.8% against the dollar. The lira, one of this year’s worst-performing emerging market currencies, recouped some losses last week after the nation’s president announced a rescue plan to encourage Turks to put their money back into the lira. Foreign investors are waiting to see if the plan marks a larger reversal in its weakness or if broader concerns over high inflation cause it to depreciate again.
In bond markets, the yield on the benchmark 10-year Treasury note ticked down to 1.483% from 1.492% Thursday. Yields and prices move inversely.
Overseas, the pan-continental Stoxx Europe 600 rose 0.5%. Markets in the U.K. were closed.
In Asia, China’s Shanghai Composite closed almost 0.1% lower. South Korea’s Kospi and Japan’s Nikkei 225 each declined 0.4%. Markets in Hong Kong and Australia were closed.
—Paul Vigna contributed to this article. Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
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