S&P 500 Jumps to All-Time High as Nvidia, Apple Rally - Barron's

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A trader works on the floor of the New York Stock Exchange.

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Maybe there is a Santa after all, at least where the stock market is concerned.

The stock market rose again Monday, with the S&P 500 closing at an all-time high as investors looked past a variant of Covid that once again threatens to disrupt the U.S. economy.

The S&P 500 closed up 1.4% at 4791.19, while the Nasdaq Composite gained 1.4% to 15,871.26. The Dow Jones Industrial Average rose 351.82 points, or 1%, to 36,302.38.

It wasn’t that the markets ignored Omicron completely. Airline stocks fell, with American Airlines (AAL), United Airlines (UAL), and Delta Air Lines (DAL) finishing the day off 0.5%, 0.6%, and 0.8%, respectively, as carriers canceled thousands of flights over the Christmas weekend. Dr. Anthony Fauci, the chief medical advisor to the White House, said he welcomed the idea of requiring vaccines for domestic travel if it encouraged more people to get vaccinated to board planes.

Cruise stocks Carnival (CCL) and Royal Caribbean (RCL) fell 1.1% and 1.3%.

But nearly every other stock emerged unscathed, with 455 stocks in the S&P 500 finishing the day higher. Notably, Big Tech stocks were among the leading gainers on Monday, with Apple (AAPL) rising 2.3%, Microsoft (MSFT) gaining 2.3%, and Nvidia (NVDA) up 4.4%. The Invesco S&P 500 Equal Weight ETF (RSP) finished the day up 1.3% but with a smaller gain than the traditional, market-cap weighted index, a sign that big stocks are still doing the heavy lifting.

U.S. stock markets have risen for four straight days. The S&P 500 closed at a record high of 4,725 on Thursday. All three major stock indexes finished the holiday-shortened week solidly higher. Markets were closed Friday for the Christmas holiday.

In the United States, the spread of the Omicron variant of Covid-19 has pushed daily virus cases ahead of those fueled by the Delta variant over the summer, according to CNN. Yet the market seems to be accepting the virus as the end of the year approaches.

Jeffrey Halley, a senior market analyst at OANDA, said that while markets have “priced in” that Omicron is a less virulent strain of Covid-19, the “disruption to goods and services from isolating workers, notably air travel, seems to be the main fallout so far.”

But Halley said that likely would only cause “short-term nerves” and he sees the “global recovery story for 2022 still on track.”

Don’t expect things to get much more exciting. The corporate calendar for the week between Christmas and New Year’s Day will be quiet. No major companies are scheduled to report earnings or meet with analysts. Economic data also will be light, except for some reports on the U.S. housing market.

“We’d expect generally quiet trading that will be driven by Omicron headlines and year-end positioning (that’s likely to be the case all week),” said Tom Essaye of the Sevens Report.

“Any stories that further confirm Omicron Covid is not as severe as previous Covid will help stocks extend the rally into year-end, while any headlines about lockdowns will be a headwind,” Essaye wrote in a note Monday.

Or maybe it’s just your typical, year-end Santa Claus rally, one that seems immune to Covid-19.

Here are some stocks on the move Monday:

Moderna (MRNA) dipped 1.2% Monday and was down for a fifth straight session. A report said the vaccine maker was fighting a shareholder proposal demanding the company open up its Covid-19 vaccine technology and pricing to low-income countries.

BridgeBio Pharma (BBIO) was down 72% after the pharmaceutical company said a Phase 3 study of its main drug failed to meet its primary endpoint at month 12.

Oil & gas companies APA (APA) and Devon Energy (DVN), which gained 7.3% and 6.1%, respectively, were the S&P 500’s biggest winners as the price of oil gained 2.4% Monday.

FactSet Research Systems (FDS) advanced 1.3% after agreeing to buy S&P Global’s (SPGI) CUSIP Global Service for $1.9 billion. S&P Global rose 1%.

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

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