(Updated)

Tech rally lifts Wall Street from Omicron-driven rout

Tech rally lifts Wall Street from Omicron-driven rout
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NEW YORK/BENGALURU (Nov 29): Bargain buying in technology stocks drove Wall Street higher on Monday following a slump related to Omicron, while the Dow Jones lagged its peers as major banks fell and investors awaited more information on the new coronavirus variant.

The S&P technology subindex jumped 2.1%, indicating investors were likely favouring pandemic-resistant technology stocks amid growing fears of Omicron.

Gains in Amazon.com and Tesla Inc also drove the S&P consumer discretionary sector 1.7% higher, with investors viewing Friday's losses as a cue for bargain hunting into high-value tech names.

"People are looking at it as a little bit of a sale on Friday and an opportunity to get into some areas of the market that got hit hard," said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.

Wall Street indexes had slumped between 2.0% and 3.5% on Friday, following news of the Omicron variant. Investors were now awaiting an update from President Joe Biden on the virus and the country's response, due later in the day.

Twitter Inc pared early gains and traded 0.1% lower after the social media firm said CEO Jack Dorsey will step down and be succeeded by Chief Technology Officer Parag Agrawal. The move ends Dorsey's run as being CEO of two major technology companies, the second being digital payments firm Square Inc.

Square's shares fell 0.4%.

The Dow severely lagged its peers, with major bank stocks weighing the most after Treasury yields fell from the day's highs.

Investors were considering a potential delay to the Federal Reserve's plans for raising interest rates, in light of the new virus variant.

"If Omicron did become a major issue, it would have to be bigger than the Delta waves which we just went through. There's no question that the (Fed) taper would either be paused or delayed," said Thomas Hayes, managing member, Great Hill Capital LLC, New York.

Merck & Co Inc fell 4.5% and was also among the top drags on the Dow. The stock extended Friday's losses after updated data from a study of its experimental Covid-19 pill showed lower efficacy in reducing risk of hospitalisation and deaths than previously reported.

At 11:37 a.m. ET, the Dow Jones Industrial Average was up 136.63 points or 0.39% at 35,035.97, and the S&P 500 was up 50.66 points or 1.10% at 4,645.28. The Nasdaq Composite was up 232.46 points or 1.50% at 15,724.11.

Among other stocks, casino operators Wynn Resorts and MGM Resorts International slipped 3.8% and 1.8% respectively, tracking losses in their Macau units, which were rattled by arrests over alleged links to cross-border gambling and money laundering.

Advanced Micro Devices rose 2.5%, following a report electric-car maker Tesla has started using a new AMD chip in Model Y vehicles in China.

Tesla's shares gained 4.6% after a report that chief Elon Musk urged employees to reduce cost of vehicle deliveries.

Apple Inc gained 1.9% after HSBC raised its price target on the iPhone maker's stock.

Declining issues outnumbered advancers for a 1.06-to-1 ratio on the NYSE and for a 1.51-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and 15 new lows, while the Nasdaq recorded 29 new highs and 215 new lows.