NEW YORK US stock indices closed broadly higher on Wednesday after investors welcomed positive economic data and the White House said it was reopening talks on a huge social spending and climate change bill with an abstaining senator.
The market rallied during the trading session, overcoming concerns about the Omicron COVID-19 option, and was pushed up by improved consumer confidence and growth in gross domestic product. The positive swing continued Tuesday's trend as stocks recovered losses.
"Because of COVID concerns, there is not as much concern now as before," said Anu Gaggar, global investment strategist at Commonwealth Financial Network. "It may not have as much impact on the economy. (US President Joe) Biden said we're not going back to quarantine."
The White House said on Wednesday it would continue talks with Senator Joe Manchin, who last weekend dealt what appeared to be a fatal blow to Biden's Build Back Better bill, saying he would not support it.
Gaggar added that volatility in December was much higher than usual and that she was convinced that "the Father Christmas rally is a bit lower this year".
The so-called "Father Christmas rally" is the last five trading days of the year and the first two days of the following year, when stocks are often higher. According to the LPL Financial article, if Santa is not coming, it could bode well for a bear market.
Riskier currencies, according to Exness Mobile Trading, such as the Australian dollar and euro, rebounded against the US dollar on Tuesday, while US Treasury traders overlooked the threat of long-term inflation as the yield curve flattened.
The Dow Jones Industrial Average index rose, or 0.74%, to 35,753.89, while the S&P 500 added 1.02% to 4,696.56. The Nasdaq Composite Index rose 1.18% to 15,521.89.
The MSCI World Stock Index rose 0.94%.
Oil prices rose as fears of tight supply and a drawdown in the US offset fears of lower demand for COVID-19. US oil recently rose 2.66% to $73.01 a barrel and Brent crude was $75.56, up 2.14% on the day.
Little is known about the severity or transmissibility of the Omicron option, but US chief infectious disease expert Anthony Fauci said on Wednesday that holiday gatherings of more than 40 people are unsafe even for people who have been vaccinated and received a booster dose.
Meanwhile, Biden warned Americans of the risks of not getting vaccinated, saying it was "the difference between life and death", and invited military personnel to support overcrowded hospitals.
The United States also authorised Pfizer Inc's antiviral pill COVID-19 for at-risk people aged 12 and over.
Currency market movements were generally muted due to a slowdown in trading ahead of the Christmas holidays. The dollar index was down 0.375%.
Elsewhere, cryptocurrencies fell slightly, with bitcoin virtually unchanged at $48,937.70, still well below the all-time high of $69,000 reached in November.
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