Wall Street rallies with Nasdaq up 3% as tech takes off

Business

Wall Street’s main indexes rallied strongly on Tuesday, with the Nasdaq leading gains as investors piled back into technology stocks and semiconductors in particular after Intel (INTC.O) announced plans to take its self-driving car unit public.

The chip giant’s decision to list Mobileye in the United States in mid-2022 sent its shares climbing 3.6%. This helped boost the Philadelphia SE Semiconductor index (.SOX) 4.7%, bouncing off a near one-month low hit in the previous session.

All of the 11 major S&P sectors were advancing, with the information technology sector (.SPLRCT) taking the lead and much of the top percentage gains coming from chip companies.

Investors were also encouraged by some positive news on the Omicron variant of COVID-19, which had helped send investors to the exits last week. Shares of Vir Biotechnology (VIR.O) jumped on Tuesday after British drugmaker GSK (GSK.L) said an antibody-based COVID-19 therapy it is developing with Vir is effective against all mutations of the Omicron variant.

“The headline from Glaxosmithkline was instrumental to people’s sentiment today,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. He also cited the Intel news and hopes 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.”

By 2:31PM ET, the Dow Jones Industrial Average (.DJI) rose 512.58 points, or 1.46%, to 35,739.61, the S&P 500 (.SPX) gained 95.81 points, or 2.09%, to 4,687.48 and the Nasdaq Composite (.IXIC) added 469.75 points, or 3.09%, to 15,694.90.

The CBOE volatility index (.VIX), too, eased from a 10-month high hit last week.

Travel shares continued gaining, though at a slower pace than Monday with the S&P 1500 Airlines (.SPCOMAIR) last up 0.6% after rising 5% on Monday and the S&P 1500 Hotels, Restaurant and Leisure (.SPCOMHRL) indexes rising 2%.

American Airlines (AAL.O) added 1% after the carrier announced the retirement of Chief Executive Officer Doug Parker.

Merck & Co (MRK.N) fell 1.9% as Guggenheim downgraded the stock to “neutral” from “buy” after the drugmaker paused enrollment in two late-stage clinical trials testing its experimental drug for treatment and prevention of HIV-1.

Advancing issues outnumbered declining ones on the NYSE by a 5.38-to-1 ratio; on Nasdaq, a 4.33-to-1 ratio favored advancers.

The S&P 500 posted 37 new 52-week highs and no new lows; the Nasdaq Composite recorded 47 new highs and 40 new lows.