Market Snapshot: S&P 500 turns lower as U.S. stock indexes trade mixed Tuesday afternoon

What’s driving markets?

Investors are betting that the spread of the omicron variant of the coronavirus won’t capsize economic growth, even if expectations for another powerful run-up in stocks seems doubtful following outsize gains in 2021.

The market is expecting omicron to be “pretty mild” despite being highly contagious, anticipating that the variant is unlikely to lead to “serious lockdowns” in the U.S., said Scott Wren, senior global market strategist at Wells Fargo Investment Institute, in a phone interview Tuesday. Meanwhile, holiday-shopping sales looked “pretty good,” giving the stock market some momentum in the final stretch of 2021.

On Monday, the market set off on its best so-called Santa Rally, which tends to show up for U.S. stocks in the final week of December and first two trading sessions of January, in about two decades.

“It seems that last week’s reports confirming that the omicron coronavirus variant is not as deadly as prior strains, kept market participants willing to increase their exposure this week as well,” said Charalambos Pissouros, head of research at JFD Group.

While the omicron variant spreads around the globe, particularly wreaking havoc on holiday travel due to rising cases among airline staff in particular, investors have taken heart from news Monday that the U.S. Centers for Disease Control and Prevention cut its recommended COVID-19 isolation time to five days, from 10, if affected individuals are symptom-free.

Still, Apple
AAPL,
-0.62%
said it would temporarily close 11 New York City stores as a precaution against rising cases. And major cities around the world, including New York City, are paring down New Year’s Eve celebrations as a way of combating the virus’ spread. Apple’s shares were down 0.5% Tuesday afternoon.

Read: Big Tech heads for ‘a year of thousands of tiny tech papercuts,’ but what antitrust efforts could make them bleed?

In a light week for U.S. economic data, the S&P CoreLogic Case-Shiller 20-city price index posted an 18.4% year-over-year gain in October, down from 19.1% the previous month. That measure of U.S. home prices, released Tuesday, marked the third consecutive month showing annual appreciation occurred at a slower pace.

“It’s good for the housing market if price appreciation slows because then more people can afford housing,” said Wren. “First-time home buyers are having a tough time affording these prices.” 

Meanwhile, China Evergrande Group
3333,
+9.46%

EGRNF,
+5.77%,
the heavily indebted real-estate developer, said on Tuesday that construction work had resumed at more than 90% of its stalled residential projects.

Which companies are in focus?

• Shares of Digital Turbine Inc. APPS were down 2% Tuesday afternoon, after the media and mobile communications company announced a multiyear partnership with Alphabet Inc.’s GOOGL
  GOOG,
  -1.22%
  Google.

• Shares of Kiniksa Pharmaceuticals Ltd. KNSA were off 2% Tuesday, after the biopharmaceutical company said a Phase 3 trial of mavrilimumab for treatment of COVID-19-related acute respiratory syndrome (ARDS) failed to meet the primary efficacy endpoint.

• Mercury Systems Inc. MRCY said Tuesday that it has adopted a one-year shareholder rights plan, also known as a “poison pill,” as protection from a hostile takeover during a period in which the aerospace and defense technologies company believes its stock is undervalued. Its stock was up 0.8%.

How are other assets faring?

• The yield on the 10-year Treasury note TMUBMUSD10Y slipped 1 basis point to around 1.47%. Yields and debt prices move opposite each other.

• The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was up less than 0.1%.

• Oil futures rose, with the U.S. benchmark CL00 for February delivery
  CLG22,
  +0.46%
  adding 0.6% to trade at $76.04 a barrel. Gold futures GC00 for February delivery
  GCG22,
  -0.15%
  gained 0.1% to trade at $1,810.70 an ounce.

• Bitcoin BTCUSD was falling to around $48,000, after testing a rise toward $52,000.

• The Stoxx Europe 600 index SXXP closed 0.6% higher, while London markets were closed.

• The Shanghai Composite SHCOMP ended 0.4% higher, while the Hang Seng Index HSI finished up 0.2%. Japan’s Nikkei 225 NIK closed 1.4% higher and China’s CSI 300
  000300,
  +0.74%
  rose 0.7%.

—Barbara Kollmeyer contributed to this article.