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Dec. 6, 2021, 4:55 p.m. EST

Dow scores biggest point gain in more than a year, while S&P 500 ends 1.2% higher as omicron worries take a break

By Vivien Lou Chen and Mark DeCambre

The Dow Jones Industrial Average scored its biggest daily point gain in more than a year on Monday, while the S&P 500 climbed to its highest close in a week, as investors shrugged off fears about COVID’s omicron variant and prepared for new inflation data on Friday.

What happened

  • The Dow Jones Industrial Average (DOW:DJIA) finished up 646.95 points, or 1.9%, at 35,227.03, powered by strong point gains in UnitedHealth Group Inc . (NYS:UNH) , Goldman Sachs Group Inc. (NYS:GS) , Home Depot Inc . (NYS:HD) and Boeing Co. (NYS:BA) . For the Dow, it was the largest daily point gain since Nov. 9, 2020, and biggest percentage gain since March 1, 2021.

  • The S&P 500 (S&P:SPX) closed higher by 53.24 points, or 1.2%, at 4,591.67, marking its highest close in a week.

  • The Nasdaq Composite Index (NASDAQ:COMP) finished up by 139.68 points, or 0.9%, at 15,225.15 after touching an intraday nadir at 14,931.61. It’s the largest one-day point and percentage gain since Nov. 29.

  • The small-capitalization Russell 2000 index (USA:RUT) closed higher by 44.17 points, or 2.1%, at 2,203.48.

Last week, the Dow fell 0.9%, the S&P 500 declined 1.2%, and the Nasdaq Composite dropped 2.6%. Also last week, the Russell 2000 fell into a correction, commonly defined as a drop of at least 10% from a recent peak.

What drove markets

Investors shifted into risk-on mode on Monday, shrugging off uncertainty about the virus and concerns about the Federal Reserve’s policy path, even as strategists expected volatility to remain in force. Read: Fed is widely seen backing a faster taper next week Airline and cruise-ship stocks, such as United Airlines Holdings Inc. (NAS:UAL) and Carnival Corp. (NYS:CCL) , jumped amid encouraging comments from Dr. Anthony Fauci over the weekend on the outlook of the omicron variant. The popular exchange-traded fund U.S. Global Jets ETF (PSE:JETS) , which contains airline names and is often used to reflect reopening sentiment tied to COVID, closed up by 5.3%.

On Sunday, Fauci told CNN’s “State of the Union” that early reports about the spread of the omicron variant of coronavirus suggest it might be less severe than initially feared, but that “we have really got to be careful” when comparing it to the delta wave. Reports from South Africa show that while the virus is rapidly spreading, hospitalizations aren’t.“Reports of the omicron symptoms being less severe are boosting risk appetite, but it’s too soon to get carried away,” wrote Craig Erlam, a London-based senior market analyst for OANDA Corp. “I expect extreme caution to remain until the data gives us cause for more optimism.”

In a pre-emptive strike to control the virus, New York City Mayor Bill de Blasio announced new rules on Monday in which all private-sector employers will have to mandate vaccinations for their workers, starting later this month. Under new mandates for indoor dining, entertainment and gyms, two shots will be required for people over 12. One shot will be required for children aged 5 to 11, de Blasio said.

Meanwhile, traders continued to react to the implications of jobs for November, which showed slowing growth but a steep decline in unemployment , as they prepare for Friday’s release of consumer price data . <STRONG>Want intel on all the news moving markets? Sign up for our daily Need to Know newsletter. Use <INTERNET LOCATION="EXTERNAL" URL="https://www.marketwatch.com/newsletters?sub=700&amp;mod=article_inline">this link to subscribe</INTERNET>.</STRONG>

“Against this backdrop of uncertainty and angst, portfolio diversification, particularly considering exposure to both high yield and quality assets, remains the primary tool for investors,” wrote Seema Shah, chief strategist at Principal Global Investors.

Important news out of China also was being parsed for its potential impact on investor sentiment, as the People’s Bank of China cut the country’s reserve requirements for banks, while China Evergrande (HKG:HK:3333) admitted it might not be able to repay creditors.This year “has been marked by a confluence of events that have no historical parallel: a unique growth surge, a supply-driven spike in inflation and new central bank frameworks that are stress-tested in real time,” Jean Boivin of BlackRock Investment Institute and others wrote in a note Monday.“We are still overweight equities even as the omicron virus strain and the Fed’s catching up to inflation reality have hurt risk sentiment,” BlackRock Investment wrote.

Which companies were in focus?

  • Special-purpose acquisition company Digital World Acquisition Corp . (NAS:DWAC) , which plans to merge with Trump Media & Technology Group , said it received preliminary, fact-finding inquiries from regulatory authorities and is cooperating. Its shares closed down 2.6%.

  • Shares of Lucid Group Inc.  LCID finished 5.1% lower after the California-based electric-vehicle maker disclosed that it was subpoenaed by the Securities and Exchange Commission related to an investigation. 

  • Jack in the Box Inc.   JACK   said Monday it will pay $12.51 a share for Del Taco Restaurants IncTACO  in a deal valued at about $575 million. Shares of Jack closed down 4.1%, while Del Taco shares finished 66% higher.

  • BuzzFeed Inc.   BZFD shares closed 11% lower in the stock’s trading debut on the Nasdaq Monday after the digital media company closed its business combination with 890 5th Avenue Partners Inc., a special-purpose acquisition company.

  • Becton Dickinson & CoBDX said Monday that the spinoff of its diabetes care business will be named “embecta.” Its stock finished 0.8% higher.

  • Shares of Moderna Inc . (NAS:MRNA) , closed down by 13.5% as investors wrestled with news of the omicron variant.

How did other assets fare?

  • The yield on the 10-year Treasury note  BX:TMUBMUSD10Y  rose 9.1 basis points on Monday to 1.433%, up from 1.342%. It’s the largest one-day gain for the yield in more than three weeks. Prices for Treasurys fall as yields rise.

  • The ICE U.S. Dollar Index  DXY , a measure of the currency against a half-dozen other monetary units, was up 0.2%

  • In oil futures, West Texas Intermediate crude  CL00  for January delivery  CLF22 climbed $3.23, or 4.9%, to settle at $69.49 a barrel, after notching a  sixth straight week of declines last week.

  • Gold futures  GC00  for February delivery GCG22 ended lower, falling $4.40 or almost 0.3%, to settle at $1,779.50 an ounce.

  • The Stoxx Europe 600 Index  SXXP closed up 1.3% higher on Monday. London’s FTSE 100 Index  UKX closed higher by 1.5%, marking its largest one-day point gain since July 21.

  • In Asia, the Shanghai Composite Index  SHCOMP closed 0.5% lower, while the Hang Seng Index  HSI ended 1.8% lower in Hong Kong. Japan’s Nikkei 225 Index  NIK fell 0.4%.

— Steve Goldstein contributed to this article

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