The S&P 500 almost hit its daily high on Monday trading. The news of the cancellation of more than 800 flights in the US due to the spread of the Omicron variant was reported before that. However, investors probably assessed the damage to airlines, considering strong retail sales, which stressed the economic power and alleviated concerns about flight cancellations.
S&P 500 index shows gains, however experts are sceptical about pre-New Year's trading
For example, Mastercard Inc.reported that retail sales rose by 8.5% during the holiday shopping season (from November 1 to December 24) due to a surge in online sales.
New York chief market economist Peter Cardillo said that despite the coronavirus variant and travel disruptions, retail sales had risen significantly. He added that it was a positive sign for the economy in the new year.
However, some sectors were hurt. Travel stocks, which usually decline due to negative news about the coronavirus pandemic, traditionally fell after US airlines canceled many flights on Sunday. Many travelers were forced to change plans for Christmas owing to the increase in COVID-19 cases.
Meanwhile, shares of Delta Air Lines, United Airlines, American Airlines and Southwest Airlines fell by 1.6 – 2.1% at the premarket. Quotes of cruise operators Norwegian Cruise Line Holdings, Royal Caribbean and Carnival Corp. dropped by 2.5 – 3%.
However, economists are still optimistic. Cardillo noted that the market would continue to grow despite still prevailing fear of viruses.
Notably, the S&P 500 index closed at a record high on Thursday due to optimism related to the Omicron variant. Investors felt relief after the news of the economic impact of the strain was announced as it turned the markets upside down earlier this month.
Currently, the three major Wall Street indices are targeting a third straight year of gains, with the benchmark S&P 500 index nearing the end of the year with a 25.8% gain. The Dow Jones should rise by 17.5%, while the Nasdaq expects a 21.4% gain.
At 8:20 am ET, the Dow e-minis index went up 82 points or 0.23%, and the S&P 500 e-minis index gained 17.25 points or 0.37%.
Shares of the Nasdaq 100 e-minis rose by 76 points or 0.47%, while stocks of major companies Tesla, Microsoft Corp. and Meta Platform added 0.5-1.5%.
Besides, it is not recommended to increase trading volumes these days as experts are predicting fewer trades than usual on New Year's Eve. It may lead to markets being susceptible to volatile movements. According to statistics, the last five trading days of December and first two days of January usually generate considerable profits for US stocks in 75% cases since 1945 (according to CFRA Research).
Shares of GoDaddy Inc rose by 5.2% after activist investor Starboard Value LP reportedly bought a 6.5% stake in the company worth about $800 million.
The Financial Times reported on Monday that Chinese giant Didi Global Inc, taking the lead on the Hong Kong stock exchange lately, has barred current and former employees from opening shorts on the company's stock indefinitely. Shares of Didi, listed in the US, fell by 0.7 percent.
So far, experts are not giving any reasons for the suspension of trading on the company's profile. More information will probably be available soon.