US stocks rise as investors weigh China Covid outbreak

U.S. stocks rose on Thursday as investors sought a bargain in tech stocks, which outpaced a surge in Covid-19 cases in China after the country relaxed its pandemic policies.

Wall Street stumbled this week due to rapid spreads Corona virus Risks to the global economy have increased in China. There is no fundamental change in that outlook, and Jupiter’s move is unlikely to signal a change in the market’s overall direction.

The benchmark S&P 500 rose 1.7 percent and the Nasdaq Composite rose 2.6 percent as investors bought technology stocks such as Tesla, Netflix and Apple. Many investors on Thursday said trading volumes were thin due to the holiday, meaning relatively small trades could skew or exaggerate trends.

Shares Tesla, which rose 8.1 percent, has fallen by more than a third this month on fears that the electric carmaker’s chief executive, Elon Musk, is being distracted by his purchase of Twitter. Apple, which rose 2.8 percent on Thursday, fell 12 percent in December as investors worried about disruptions to its manufacturing operations in China. Netflix rose 5.1 percent.

U.S. stocks may also have been bolstered by data showing weekly jobless claims rose by a better-than-expected 9,000 to 225,000 on Thursday morning. A meaningful decline in the labor market could suggest that the Federal Reserve’s aggressive efforts to reduce inflation have paid off, with Citi strategists noting that weekly levels are still in late 2019, suggesting a recession is far from over.

A research group pointed out that the tech-heavy Nasdaq is down 10.9 percent for the month to date, according to Bespoke Investment Group, before the market opened.

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“If the Nasdaq holds, it will be the worst December since 1971,” it said. “Tax-loss selling, and no buyers in sight, may have played a role in this recent weakness, and that pressure will end when the calendar turns.”

U.S. gains lifted benchmarks in Europe, which suffered from thin trading volumes over the holiday season. The Stoxx 600 ended 0.6 percent higher. The commodities-heavy FTSE 100 recovered morning losses to close up 0.2 percent.

In commodities markets, Brent crude, the international oil benchmark, was down 1.2 percent at $82.26.

The yield on the 10-year U.S. Treasury note was down 0.06 percentage points at 3.83 percent. As prices rise, yields fall.

Hong Kong’s Hang Seng index fell 0.8 percent, while China’s blue-chip CSI 300 index fell 0.4 percent, as major cities across the country grapple with rising Covid cases.

Thursday’s decline came after China’s National Health Commission said it would waive quarantine requirements for incoming travelers starting Jan. 8, even as the country weathers its worst Covid outbreak. The announcement is the latest relaxation of the government’s zero-covid policies that have hit economic growth.

Emerging countries including the US and Italy have announced that they will require negative Covid tests for air passengers traveling from China.

Hong Kong further eased its pandemic restrictions on Wednesday, lifting restrictions on PCR tests on arrivals to the Asian financial center and dining in restaurants.

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