US Markets Close Higher As Omicron Fears Ease

US stock indexes finished Tuesday's session with strong gains as investors shook off some anxiety about the latest virus variant and investors piled into technology stocks that boosted Nasdaq.

Intel's announcement of plans to take its self-driving car unit Mobileye public in the United States next year sent its shares soaring and cheered chip investors. The Philadelphia SE Semiconductor index at one point rose more than 5 percent after hitting a near one-month low on Tuesday.

Investors were also reassured by some positive news regarding the Omicron variant of Covid-19, which had helped send them fleeing from risk last week.

Before the market opened, British drugmaker GSK said an antibody-based Covid-19 therapy it is developing with Vir Biotechnology was effective against all mutations of the Omicron variant.

That news added to the relief rally along with infectious disease official Anthony Fauci's comment on Tuesday that preliminary evidence indicates while Omicron likely has a higher degree of transmissibility it appears to be less severe. Fauci had made similar comments on Sunday.

"A week ago we saw a big scare because of Omicron and over the following week it appeared to be very contagious but less severe than people were worried about," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, said the Glaxosmithkline headline was already "instrumental to people's sentiment."

He also cited the Intel news and investor bets that the market would see its traditional December boost, known as the Santa Claus rally.

"There's certainly fears of missing out on the Santa Claus rally," said James. "It's a bigger picture risk-on mentality that's taking hold today."

The S&P 500 gained 2.1 percent to 4,686, while the Nasdaq Composite gained 3.0 percent to 15,686. The Dow Jones Industrial Average rose 1.4 percent to 35,719.

(Reuters)