U.S. Stocks Climb More Firmly Into Positive Territory After Initial Jump

(RTTNews) - After ending the previous session sharply lower, stocks have shown a strong move back to the upside during trading on Monday. The major averages have all shown notable rebounds, with the tech-heavy Nasdaq leading the way higher.

In recent trading, the Nasdaq and the S&P 500 reached new highs for the session. The Dow is up 335.57 points or 1 percent at 35,234.91, the Nasdaq is up 314.23 points or 2 percent at 15,805.88 and the S&P 500 is up 73.57 points or 1.6 percent at 4,668.19.

Bargain hunting has contributed to the strength on Wall Street after the steep drop seen last Friday dragged the major averages down to their lowest closing levels in at least a month.

News of the detection of a new coronavirus variant contributed to the sell-off seen in the previous session, as traders worried the pandemic would continue to weigh on the global economy.

The new Covid variant, assigned the Greek letter omicron, has been labeled a "variant of concern" by the World Health Organization.

The WHO described the global risk posed by the omicron variant as "very high" due to a high number of mutations that "may be associated with immune escape potential and higher transmissibility."

However, the South African doctor who treated early cases of the new variant told the BBC countries could be "panicking unnecessarily" and the symptoms she had seen were "extremely mild."

President Joe Biden also told reporters there is no need for the U.S. to reimpose lockdowns as a result of the new variant, helping lift stocks to new highs.

In U.S. economic news, the National Association of Realtors released a report showing pending home sales rebounded by much more than expected in the month of October.

NAR said its pending home sales index spiked by 7.5 percent to 125.2 in October after tumbling by 2.4 percent to a revised 116.5 in September.

Economists had expected pending home sales to increase by 1.0 percent compared to the 2.3 percent slump originally reported for the previous month.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Sector News

Semiconductor stocks have moved sharply higher over the course of the session, driving the Philadelphia Semiconductor Index up by 3.3 percent.

Significant strength also remains visible among software stocks, as reflected by the 2.5 percent jump by the Dow Jones U.S. Software Index.

Oil service stocks have also shown a strong move to the upside on the day, resulting in a 1.8 percent advance by the Philadelphia Oil Service Index. The index is bouncing off its lowest closing level in two months.

The rebound by oil service stocks comes as the price of crude oil for January delivery is surging $2.76 to $70.92 a barrel after plummeting $10.24 to $68.15 a barrel last Friday.

Networking, utilities and biotechnology stocks are also seeing considerable strength in afternoon trading, while tobacco stocks are among the few groups bucking the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index tumbled by 1.6 percent, while Hong Kong's Hang Seng Index slumped by 1 percent.

Meanwhile, the major European markets moved to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 0.9 percent, the French CAC 40 Index rose by 0.5 percent and the German DAX Index edged up by 0.2 percent.

In the bond market, treasuries have climbed off their worst levels of the day but remain firmly negative. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.4 basis points at 1.526 percent.