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(Reuters) – Wall Street’s main indexes closed sharply higher on Tuesday, with strength in travel and tech shares as well as in Nike (NYSE:NKE) and Micron Technology (NASDAQ:MU) following their earnings, as stocks rebounded from a coronavirus-fueled rout the session before.
The rapidly spreading Omicron variant of the coronavirus has rattled stock markets around the world, triggering volatility in the final month of 2021, which has otherwise been a strong year for equities.
Gains in massive technology and tech-related stocks such as Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) lifted indexes on Tuesday, as did increases in economically sensitive groups such as energy. Travel-related stocks surged, with Carnival (NYSE:CUK) Corp, Las Vegas Sands (NYSE:LVS) and Expedia (NASDAQ:EXPE) Group among the top percentage gainers on the S&P 500.
“It is clearly a risk-on day,” said David Joy, chief market strategist at Ameriprise Financial (NYSE:AMP) in Boston. “This is clearly, at least for the day, investors saying, ‘You know what, we are going to be able to ride through this Omicron surge and come out the other side in pretty good shape.’”
The Dow Jones Industrial Average rose 560.54 points, or 1.6%, to 35,492.7, the S&P 500 gained 81.21 points, or 1.78%, to 4,649.23 and the Nasdaq Composite added 360.14 points, or 2.4%, to 15,341.09.
Defensive sectors that have led in December lagged on Tuesday, with consumer staples and utilities posting slim declines.
Nike shares rose 6.1% after the sports apparel company’s results beat quarterly estimates for profit and revenue, and it said it was more confident that supply chain issues would ease in its next fiscal year.
Micron Technology shares jumped 10.5% after the chip company forecast second-quarter sales and profits will beat estimates with shortages easing in 2022. The Philadelphia SE Semiconductor index rose 3.4%.
“If Micron’s forecast is strong, that tells us broadly speaking that demand is strong across many different industries,” said King Lip, chief strategist at Baker Avenue Asset Management, adding that Micron’s products “go into so many different industrial applications.”
General Mills (NYSE:GIS) shares fell 4% after the consumer staples company missed Wall Street estimates for quarterly profit.
The benchmark S&P 500 has gained 23.8% so far in 2021.
Some investors are wary about a tougher environment for equities as the Federal Reserve is expected to start raising interest rates next year.
“It’s good to see green going into the next year but if you just take a step back and look at the broader picture, you’re seeing financial conditions change,” said Joshua Chastant, senior investment analyst at GuideStone Capital Management.
Advancing issues outnumbered declining ones on the NYSE by a 4.08-to-1 ratio; on Nasdaq, a 2.95-to-1 ratio favored advancers.
The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 27 new highs and 99 new lows.
About 10.1 billion shares changed hands in U.S. exchanges, below the daily average of roughly 12 billion over the last 20 sessions.
