Stocks open higher after Omicron variant news eases

Stocks open higher after Omicron variant news eases

Stock futures opened higher Thursday evening to hold gains after a recovery rally, with an initial wave of concerns over the economic impact of the Omicron variant at least temporarily easing.

Contracts on the S&P 500 advanced were made. The blue-chip index was higher by 1.4% during the regular session, marking its biggest jump since Oct. 14 Thursday. The Dow and Nasdaq both advanced. Volatility fell 10% to below 28 earlier this week, and the CBOE Volatility Index VIX dropped 10% earlier this week. Travel stocks, including airlines, hotels and lodging firms, held onto earlier gains in late trading as traders bought the pullback in these highly volatile areas of the market.

The move higher in stocks on Thursday came after market participants digested recent headlines on the Omicron variant, including the discovery of multiple cases in the U.S. The new variant's transmissibility and severity of infection has been analyzed by investors, but they have temporarily cooled back from peak levels of concern.

Jim Smiegiel, SEI's chief investment officer, told Yahoo Finance Live that the markets have been pricing in a worst-case scenario. There was a lot of uncertainty, but you can see some signs of positive outlooks coming into play today. The cases we've seen in the States have been mild. He said the market is shifting gears a bit, and perhaps lessening the intensity on the potential for negative outcomes. The issue is more about the world government's reaction to the variant and what that means from a lockdown perspective. The market is still struggling with that, and that's something the market is struggling with at this stage. Others have struck an even more optimistic tone, suggesting that the economic impact of the Omicron variant will ultimately prove less drastic than initially feared.

Garrett Melson, Natixis Investment Managers Solutions portfolio strategist, said that if you look back at Delta, you really didn't see a significant impact on actual consumption, so we saw a shift away from services in the early stages of the reopening back towards goods.

On the capex front, we still see signs that companies are saying they're going to invest in their businesses, and they're doing just that, Melson said. There is no appetite from the government and there is no appetite from consumers. Traders are waiting for the U.S. Labor Department's latest monthly jobs report Friday morning. The November jobs report is expected to show more than half a million payrolls returned last month, with the unemployment taking another step down to reach a March 2020 low of 4.5%. The report comes after a slew of positive data points on the labor market in recent days, with weekly unemployment claims lower than expected, and ADP's private payrolls report topping expectations on Wednesday.

During the overnight session, there were the main moves in markets:

Emily McCormick is a reporter for Yahoo Finance.