US stocks start higher, regain strength after Friday’s decline
Beijing Stocks open with broad gains on Wall Street on Monday as markets regain strength after a major stumble on Friday amid concerns about the spread of the new type of coronavirus. Signs of fear in the market also receded as traders regained their appetite for riskier assets. The S&P 500 is up 1.1%, and the tech-heavy Nasdaq is back 1.3%. Both fell more than 2% on Friday. Crude oil prices jumped 6.7% and bond yields are up again. European markets were also higher, while Asian markets closed mostly lower. The yield on the 10-year Treasury rose to 1.56%.
This is an urgent news update. A previous AP story follows below.
European stocks and oil prices rebounded and Wall Street prepared to open higher on Monday even as Asian markets continued to slide, as investors weigh the novel coronavirus variable, omicron, which is in more countries and prompts some governments to reimpose travel controls.
Standards gained in London, Frankfurt and Paris by midday. Indexes in Shanghai, Tokyo and Hong Kong closed lower, although losses were less than Friday’s low, due to reports that the variant first spotted in South Africa appeared to be spreading across the world.
On Wall Street, S&P 500 futures rose 0.9%. Dow Jones Industrial Average futures rose 0.7%.
As health authorities scrambled to analyze the new variant, dealers were clinging to the hope that it wasn’t more dangerous than other virus strains.
Joshua Mahoney, chief market analyst at IG, said: “The prospect of a less-lethal form of the virus appears to provide some relief to the risk-off sentiment that dominates Friday’s trading. However, the coming weeks are fraught with risks for investors.”
London’s FTSE 100 rose 1.2% to 7,122.61. The DAX in Frankfurt rose 0.6% to 15352.00, and the CAC 40 in Paris advanced 0.8% to 6,797.65.
On Friday, the S&P 500 fell 2.3%, posting its biggest daily loss since February. The Dow Jones lost 2.5%, while the Nasdaq Composite shed 2.2%.
Investors sold banks, energy stocks and airlines last week and moved their money into bonds and other safe haven assets.
But that pattern reversed on Monday. IAG, owner of British Airways and Spanish airline Iberia, jumped 4.2 percent, while British airline EasyJet rose 3.9 percent.
In the US, the travel and energy sectors as well as businesses are expected to boom when the pandemic loosens its grip, such as computer chip makers and hospitals, set to lead the recovery on Monday with Wall Street’s belief in an emerging global economy seemingly invigorated.
But in Asia, the Nikkei 225 index ended 1.6% lower at 28,283.92 after Japan announced that it would bar entry to foreigners from Tuesday.
The Shanghai Composite lost less than 0.1% to 3562.70, and Hong Kong’s Hang Seng fell 0.9% to 23852.24.
Seoul’s Kospi fell 0.9% to 2,909.32, and Sydney’s S&P-ASX 200 shed 0.5% to 7,239.80.
India’s Sensex rose 0.3% to 57260.58. New Zealand, Singapore and Bangkok fell, while Jakarta advanced.
The World Health Organization described Omicron as “highly contagious”, but it was not clear if it was more dangerous than the previous types.
And governments have imposed new travel restrictions, raising investor fears about potential setbacks in containing the pandemic that has killed more than 5 million people since the first cases in late 2019.
The new variant has been found as far away as Hong Kong, Belgium, Denmark, the Netherlands, Australia, Portugal and Israel. The European Union, the United States and Britain have imposed restrictions on travel from Africa. Israel banned entry to foreigners, and Morocco suspended all incoming flights for two weeks.
The omicron variable may complicate planning by central banks deciding when and how to withdraw the stimulus that boosts stock prices.
Investors were upset last week when notes from the Federal Reserve’s October meeting showed that officials said they were ready to consider raising interest rates sooner than planned in response to rising inflation. The Fed previously said that the first rate hike might not come until late 2022.
In energy markets, the benchmark US crude oil price rose $3.41 to $71.45 a barrel in electronic trading on the New York Mercantile Exchange, rebounding from Friday’s low of $10.24. Brent crude jumped $3.26 to $75.98 a barrel in London.
On Monday, the Japanese government also announced that retail sales rose 1.1% in October compared to the previous month. Auto sales fell 6.7%.
The dollar rose to 113.60 yen from 113.19 yen on Friday. The euro rose to $1.1291 from $1.1319.
Associated Press writer Kelvin Chan contributed to this report in London.
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