Dow notches five-day winning streak, S&P falls from record amid Omicron news

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Dec. 28 (UPI) — U.S. markets closed Tuesday mixed as investors worked to process news surrounding the COVID-19 Omicron variant.

The Dow Jones Industrial Average gained 95.83 points, or 0.26%, to post a five-day winning streak, while the S&P 500 dropped 0.1% to fall from a record high, and the Nasdaq Composite closed the day down 0.56%.

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The mixed results came as the world recorded a record with 1.44 million new COVID-19 infections Monday amid the spread of Omicron, according to Bloomberg tracking.

However, studies have shown Omicron infections may be less severe than other variants. Meanwhile, the U.S. Centers for Disease Control and Prevention on Monday also cut its recommended period of isolation for asymptomatic people who have tested positive for COVID-19 from 10 days to five days.

“Perversely, bad news around Omicron might be good news for the markets because it gives the Fed the impetus to continue with these very loose monetary policies,” Opimas LLC chief executive officer Octavio Marenzi told Yahoo Finance. “Too much good news for the real economy might actually be quite bad for the markets.”

COVID-19 vaccine makers took a hit amid the news Tuesday, with Moderna falling 2.2% and Pfizer dropping 2.01%.

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Shares of Nvidia dropped 2.01% and AMD stock fell 0.78% after both chipmakers helped to lead gains on Monday.

Tuesday, however, also saw a positive reversal in travel stocks, with American Airlines rising 2.04%, Delta Air Lines gaining 1.62% and United Airlines increasing 1.55% after all three major airlines posted stock losses Monday amid mass cancellations due to Omicron infections.

Overall, the S&P 500 is up more than 27% for the year, while the Nasdaq has gained 23% and the Dow has risen more than 19%.

Markets have entered the so-called “Santa Claus Rally” period during the final trading days of the year, in which the market traditionally thrives.