Stocks and oil prices fall due to Omicron restrictions

U.S. stocks edged down as investors assessed weekly data on jobless claims and the latest global restrictions to limit the spread of the Omicron variant.

The S&P 500 was down 0.4% at the opening of the market after closing 0.3% higher on Wednesday. The Dow Jones Industrial Average and the Nasdaq Composite also fell 0.4%.

The popular GameStop meme was down 4.7% in after-hours trading after the company posted profits that showed a growing loss. Amazon.com fell 0.2% pre-market after the Italian government fined it $ 1.3 billion for alleged abuse of market dominance. The European Union is also investigating the e-commerce giant.

Shares have rocked in recent weeks, rocked by conflicting headlines on the Omicron coronavirus variant and mixed signals on the health of the economy. Investors are still awaiting new data on the severity of the strain and the effectiveness of the vaccine. Some pharmaceutical companies, including Pfizer and GlaxoSmithKline, said this week that their injection and antibody therapy appear to work in early-stage studies.

The CDC said the first known U.S. case of the Omicron variant has been identified in California.

European governments have moved to tighten restrictions, raising concerns about the setbacks in the economic recovery. British Prime Minister Boris Johnson presented a new work-from-home mandate and mask guidelines on Wednesday evening. A study published by a Japanese scientist said the variant was four times more transmissible than the Delta strain.

“There is still a lot that we don’t know, we are waiting for the details to emerge,” said Arun Sai, multi-asset strategist at Pictet Asset Management. On the restrictions, “as long as it’s temporary, it doesn’t completely derail the recovery. We now know the playbook. We are talking about a postponement of one or two quarters of a resumption of services, it is the critical element which is at stake here. “

A sign that the labor market is improving faster than expected, weekly jobless claims stood at 184,000, the lowest level since 1969, according to the Labor Department. Claims fell from the previous week and were lower than economists’ forecasts.

The benchmark 10-year Treasury yield fell slightly to 1.485% on Thursday from 1.508% on Wednesday.

Oracle cloud computing company,

network company Broadcom and wholesaler Costco are expected to release results after markets close. “Profits have been strong overall, this is a really positive underlying driver for equity markets,” said Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management.

In Europe, the pan-continental Stoxx Europe 600 index fell 0.2%. UniCredit shares climbed more than 10% after the bank said it planned to return more than $ 18 billion to shareholders by 2024. Deutsche Bank shares were down 2, 7% after the Wall Street Journal reported that the Justice Department told the German lender it could have violated a criminal regulation.

Investors are awaiting new data on the severity of Omicron and the effectiveness of the vaccine.


Photo:

BRENDAN MCDERMID / REUTERS

In Asia, the Shanghai Composite Index rose 1%, while the Hong Kong Hang Seng Index climbed 1.1%. China’s producer price index posted a 12.9% increase in November from a year earlier, down from the previous month but still more than economists expected. Consumer prices have also increased.

China Evergrande Group shares fell more than 7%. China’s main central banker said on Thursday that the financial stress of the property developer and his peers should be dealt with in accordance with market principles.

Global benchmark Brent crude fell 1.2% to $ 74.96 a barrel, reversing direction after a five-day rally. It is up nearly 8% this week, supported by early indications that the Omicron variant may not weigh on energy demand as much as previously feared.

Bitcoin reversed direction after four days of gains, slipping 2.8% from its 5 p.m. level on Wednesday. It traded below $ 50,000, a 28% drop from its November all-time high.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com

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Felix J. Dixon