S&P 500 Jumps as Investors Swoop Into Tech Following Friday's Rout

© Reuters.

By Yasin Ebrahim – The S&P 500 climbed Monday, shrugging off lingering worries about the impact of the new Omicron Covid-19 variant as investors piled into beaten down tech stocks following a rout last week.

The rose 1.59%, the gained 0.89%, or 312 points, the Nasdaq gained 2.1%.

Big tech led the broader market rebound, with Facebook (NASDAQ:), Google-parent Alphabet (NASDAQ:), Amazon (NASDAQ:), Microsoft  (NASDAQ:) and Apple (NASDAQ:) rising more than 1%.

Apple was up more than 2% after HSBC raised its price target on the stock as supply chain issues that weighed on the production are expected to wane.

Twitter (NYSE:), meanwhile, fell more than 1% after the social media platform announced that CEO Jack Dorsey would be stepping down. Parag Agrawal, Twitter’s chief technology officer, will succeed Dorsey. The stock initially popped on the news.

“I’ve decided to leave Twitter because I believe the company is ready to move on from its founders,” Dorsey said in a statement.

Also helping investor sentiment, vaccine makers signaled they were preparing to adjust their current Covid-19 vaccines against the Omicron Covid variant.

Moderna (NASDAQ:) said it could launch a reformulated vaccine to tackle Omicron by early next year, sending its shares nearly 10% higher.

Health experts have indicated that it would take about two to three weeks to learn more about the transmissibility and severity of the Omicron variant.

Consumer discretionary was also among the leading sector gainers on the day, underpinned by the rise in Tesla as well as a rebound in travel and leisure stocks like Expedia (NASDAQ:), Marriott International (NASDAQ:), and American Airlines (NASDAQ:).

Tesla (NASDAQ:) jumped more than 4% even as the electric vehicle looks set to deviate from its usual strategy to ramp-up deliveries in the final quarter to top consensus estimates.

Tesla chief executive Elon Musk told the company’s employees not to ramp-up deliveries in the third quarter, and focus on the keeping costs low, CNBC reported, citing a recent memo.  

Energy was also in demand as oil prices surged following their worst daily selloff on Friday, on expectations that OPEC and its allies could delay plans to increase production amid worries about the impact on demand from the new omicron variant of Covid-19.

“In our view, there is much to suggest that OPEC+ will not initially step up its oil production any further. This is presumably also why oil prices today have gained by around 5%,” Commerzbank said ahead of the OPEC+ meeting on Dec. 2.

In other news, Roku (NASDAQ:) added to recent losses, down nearly 2%, even as Benchmark bucked the recent trend of negative commentary on the company from Wall Street, keeping its buy rating on the stock. 

“|[W]e have a markedly different view on some of the information being filtered into the marketplace,” Benchmark said, citing recent upbeat channel checks. “[O]ur channel checks indicate a much healthier in-stock level of Roku TVs at both Walmart (NYSE:) and Best Buy than feared, while we think a Google-Roku resolution could be in the offing even if a temporary blackout occurs.”


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