Wall Street steadies following omicron slide; stocks rise

Wall Street is steadying itself Monday from last week's slide caused by the newest coronavirus variant, as investors wait for more clues about just how much damage it may do to the economy.

The S&P 500 was 1.4% higher in midday trading to recover a little more than half its drop from Friday, which was its worst since February. Other areas of the market, including bond yields and crude oil, were also recovering chunks of Friday’s knee-jerk reaction to run toward safety and away from risky investments.

With vaccines in hand — and with the benefit of a weekend to mull whether Friday’s sharp market moves were overdone — analysts said the world may be in better position to weather this newest potential wave. Plus, Friday’s tumble for markets may have been exacerbated by many professional traders taking the day off following Thanksgiving.

But while the market was steadying itself, it wasn’t returning to the full-on rally it had been on before the discovery of the variant now known as omicron. The variant appears to spread more easily, and countries around the world have put up barriers to travel in hopes of stemming it. Still to be seen is how effective vaccines currently available are for the variant, and how long it may take to develop new omicron-specific vaccines.

“There are still more questions than answers regarding the new variant,” said Ryan Detrick, chief market strategist for LPL Financial. “At the same time, we’ve been living with COVID-19 for almost 20 months now, and we’ve seen multiple variants.”

The Dow Jones Industrial Average was up 244 points, or 0.7%, at 35,144, as of 12:15 p.m. Eastern time, after fading a bit from an earlier gain of 388 points. Continuing caution in the market meant the smaller stocks in the Russell 2000 index were drifting between...