[Asia Economy New York=Correspondent Baek Jong-min] As evaluations emerged that the Omicron COVID-19 variant is not severe, the Nasdaq index soared by 3% in the New York stock market. Major indices in the New York stock market showed strong gains, recovering to levels before the Omicron outbreak.
On the 7th (local time), the Dow Jones Industrial Average rose 1.4%, the S&P 500 surged 2.07%, and the Nasdaq jumped 3.03% to close. The New York stock market succeeded in rebounding for two consecutive days, significantly easing market concerns. On this day, the Nasdaq's strength stood out compared to the Dow's smaller rebound.
Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (NIAID), said in an interview with AFP that it would take a few weeks to assess the severity of the Omicron variant but initial signs suggest that Omicron may not be worse than Delta and could possibly be milder.
Fauci stated that while Omicron’s transmissibility is likely much stronger than Delta, regarding severity, it is "almost certainly not more serious than the Delta variant."
Craig Erlam, chief analyst at OANDA, explained, "Only time will tell if investors are ahead, but as concerns about Omicron ease, buying is flooding in."
Good news also came from the political front. Mitch McConnell, Republican Senate Majority Leader, announced that he had reached an agreement with Democratic Leader Chuck Schumer on raising the federal government debt ceiling. There had been concerns that failure to negotiate the debt ceiling could lead to a U.S. government default by year-end.
Travel-related stocks such as airlines, cruises, and hotels led the market rally, continuing gains for two consecutive days.
Compared to the sharp rise in the stock market, the increase in U.S. Treasury yields was limited. The 10-year U.S. Treasury yield rose by 0.051 percentage points to 1.485%. Treasury yields had fallen to the low 1.3% range but now appear close to re-entering the 1.5% range.
With the slow rise in Treasury yields, tech stocks surged. The Nasdaq’s gain on this day was the largest since March.
Apple soared 3.5% to enter the $170 range, buoyed by news that Morgan Stanley raised its target price to $200. Morgan Stanley evaluated that expectations for new product announcements in the virtual reality field had not yet been reflected in the stock price.
Most major tech stocks, including Amazon and Microsoft, also recorded gains in the 2% range.
Intel rose 3.1% following the announcement of the IPO of its autonomous driving-related subsidiary Mobileye.
Nvidia, facing a near collapse of its merger with ARM, staged a strong rebound, rising 7.9%. Semiconductor companies showed notable strength, with AMD and Micron Technology both rising 4.1%.
Tesla rose 4.2%, recovering much of its recent weakness. On this day, UBS raised Tesla’s target price from $725 to $1,000.
Cryptocurrencies surged sharply, with Coinbase jumping 8.8%, and Bitcoin-related stocks all soaring. Bitcoin recovered to $51,000, showing a clear recovery from the low of $42,000 recorded last weekend.
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