By DAMIAN J. TROISE and ALEX VEIGA AP Business Writers
Stocks closed solidly higher on Wall Street Monday, aided by a broad rally that includes travel-related companies that stand to benefit from more reopening of the economy. The S&P 500 rose 1.2%, making up nearly all the ground lost last week. Technology companies and banks accounted for a big slice of the gains. The Dow Jones Industrial Average rose 1.9%. The Nasdaq rose 0.9%. Traders were encouraged to see that Dr. Anthony Fauci, the White House’s chief medical adviser, said early indications suggested that the new omicron variant of the COVID-19 virus may be less dangerous than the delta variant.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Stocks are solidly higher on Wall Street in afternoon trading Monday, aided by a broad rally that includes a mix of travel-related companies that stand to benefit from more reopening of the economy.
The S&P 500 rose 1.2% as of 3:41 p.m. Eastern, on pace to make up nearly all of its loss last week. More than 85% of stocks in the index gained ground, with technology companies and banks accounting for a large slice of the gains. The Dow Jones Industrial Average rose 644 points, or 1.9%, to 35,345 and the Nasdaq rose 0.9%.
Small-company stocks outpaced the broader market, sending the Russell 2000 index 2.3% higher.
Wall Street was encouraged by comments from Dr. Anthony Fauci, the White House’s chief medical adviser, who said early indications suggested that the omicron variant of COVID-19 may be less dangerous than the delta variant. It will still take a few weeks to learn whether omicron is more contagious, causes more severe illness or evades immunity.
Airlines, cruise operators and a wide range of travel-related companies made solid gains. Norwegian Cruise Line vaulted 9.9% for the biggest gain in the S&P 500. Rivals Carnival and Royal Caribbean jumped 8.5% and 8.3%, respectively.
Delta Air Lines climbed 6.4%, while United Airlines gained 8.3%. Expedia Group rose 10.6%. The travel industry has been under pressure over concerns about the latest coronavirus variant and the potential for it to crimp economic activity in the midst of the busy holiday season.
Shares of vaccine makers Moderna, Pfizer and BioNTech all fell.
Bond yields rose, which benefits banks that rely on higher yields to charge more lucrative interest on loans. The yield on the 10-year Treasury rose to 1.43% from 1.33% late Friday. JPMorgan Chase rose 1.2%.
U.S. crude oil prices rose 4.9% and helped send energy stocks higher. Exxon Mobil rose 1.2%.
The stock market is coming off of a choppy week as investors gauged the threat from COVID-19, along with a mixed batch of job market data and lingering inflation concerns. The S&P 500 posted two straight weekly losses heading into this week. The benchmark index is up 22.3% for the year.
Investors are still reacting to the Federal Reserve’s plan to hasten the withdrawal of its support for the market and economy, said Michael Arone, chief investment strategist at State Street Global Advisors.
The central bank plans to speed up the pace at which it trims bond purchases, which have helped keep interest rates low. That has raised concerns that the Fed will raise its benchmark interest rates next year sooner than expected.
“What you’re seeing now is that is being priced into markets and that underlying shift in expectations is starting to play out in market leadership,” Arone said.
Banks and other sectors that benefit from higher interest rates are starting to lead the market higher, while industries that typically suffer from higher rates, like technology stocks, are lagging, he said.
Investors will get more economic data this week that could help give them a clearer picture of the economy.
The Labor Department will release its job openings and labor turnover survey for October on Wednesday, along with its weekly unemployment benefits report on Thursday. Wall Street will get another update on inflation when the Labor Department releases the Consumer Price Index for November on Friday.
A mix of corporate news helped send several stocks higher. Del Taco Restaurants surged 66.2% on news it is being bought by Jack in the Box.
Department store operator Kohl’s rose 5.9% after activist investor Engine Capital LP pushed for a sale or spin off.
BuzzFeed fell 8.9% in its market debut after the digital media company went public through a merger with a special purpose acquisition company.
The price of Bitcoin, which fell sharply on Friday, steadied Monday, rising about 0.8% to $49,156, according to Coindesk.