BREAKING: Market Climbs, Travel Stocks Surge
The stock market was higher Monday morning as fears over the latest Covid-19 variant eased, while cryptocurrency assets continued to sell off and electric-vehicle stocks fell on news that the SEC is investigating Lucid Motors (LCID).
The S&P 500 climbed 1% and the Dow Jones Industrial Average rallied 1.6%.
The Nasdaq composite fell at the open, after semiconductors and software sectors led the technology sector lower. But the composite reversed to a 0.4% gain despite continued weakness in techs.
The Philadelphia Semiconductor Index lost 1.8%. The iShares Expanded Tech-Software ETF (IGV) fell below its 200-day moving average.
Volume rose on the NYSE and Nasdaq compared with the same time on Friday.
Travel-related stocks bounced a bit more Monday morning. U.S. Global Jets (JETS), an ETF that tracks the airline industry, rose 2.5%. Financials also led the stock market gains, with S&P Banking SPDR ETF (KBE) up more than 1%.
A small study of people with Omicron in South Africa so far has found milder symptoms than in previous types of Covid-19. U.S. chief medical adviser Anthony Fauci told CNN the Omicron virus does not appear to cause severe symptoms, based on early evidence.
U.S. oil prices rose 2.2% to $67.72 a barrel, partly on easing lockdown fears. Also, Saudi Aramco raised its official selling prices for crude into Asia for January, a sign it expects firm demand, Dow Jones reported.
Lucid Group (LCID) pared losses to 12% after the company disclosed it received a subpoena from the SEC. The inquiry involves the deal that took the electric vehicle company public, and the probe apparently is after projections and statements the company used. Lucid said it is fully cooperating.
Tesla (TSLA), the world’s largest electric vehicle company, fell 4.5% and is now below its 50-day moving average. But Li Auto (LI) bounced 3%.
Cryptocurrency-related stocks tumbled after the price of Bitcoin suffered steep losses over the weekend. Bitcoin traded at around $48,650 Monday morning, down more than 9% from late Friday, although it was off its Saturday low of $42,000, according to Dow Jones.
ProShares Bitcoin Strategy ETF (BITO) fell 10% and is now at new lows, 27% below the 41.94 close on its first day of trading Oct. 19.
Riot Blockchain (RIOT) sold off 10.7%. Marathon Digital Holdings (MARA), a cryptocurrency mining company, fell 7%. Marathon Digital fell to its 200-day moving average, adding to its November sell-off. Global X Blockchain ETF (BKCH) tumbled more than 7%.
Del Taco Restaurants (TACO) soared 64% after Jack in the Box (JACK) agreed to acquire the company in a deal valued at $575 million, or $12.51 per Del Taco share, including debt. Jack in the Box shares fell 5.5% in heavy volume, sinking to a one-year low.
Del Taco, the nation’s second largest Mexican fast-food chain by number of restaurants, closed Friday at 7.53 a share, giving the deal a 66% premium to Del Taco shareholders. Del Taco operates 600 restaurants in 16 states, and most have a drive-through.
O’Reilly Automotive (ORLY) rose above the 669.19 buy point of a base-on base formation. Volume was light, although the relative strength line is near new highs.
But Innovator IBD 50 ETF (FFTY) continued to struggle, down nearly 2% and at the lowest since July 21. Tech stocks caused most of the IBD 50’s problems.
Nvidia (NVDA), whose bid to acquire the U.K.’s Arm faces a new FTC lawsuit, fell 6.5%. Zscaler (ZS) slid 8.5% after Daiwa Securities downgraded the stock to underperform from neutral and set a price target of 286.
On the plus side, Green Brick Partners (GRBK) broke out past the 28.01 buy point of a handle entry in an undefined pattern. Volume was heavy after Wedbush initiated the stock with an outperform rating and a 33 price target.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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