(Updates closing prices)
* Airline gains lead industrials higher, consumer staples
* Kohl's up as Engine Capital asks for sale of e-commerce
* Indexes up: Dow 1.87%, S&P 1.17%, Nasdaq 0.93%
Dec 6 (Reuters) - Wall Street's major averages closed higher
on Monday with economically sensitive sectors and travel-related
stocks advancing solidly as investors were encouraged by some
optimistic comments from a top U.S. official on the latest
Of Wall Street's three major averages, the Dow rose the most
while industrials and consumer staples, up
around 1.6%, were the S&P's strongest sectors followed by
energy and utilities, up 1.5%. But declines in
COVID-19 vaccine companies diminished gains in the healthcare
While the Omicron COVID-19 variant has caused alarm and some
new restrictions around the world, investors appeared to be
reassured by Dr. Anthony Fauci, the top U.S. infectious disease
official, who told CNN that "thus far it does not look like
there's a great degree of severity to it." However, he did say
that more study is needed.
"People are less worried about the variant," said King Lip,
chief investment strategist at Baker Avenue Asset Management in
Lip also cited a boost from news that China's central bank
would cut the amount of cash that banks must hold in reserve,
potentially boosting overseas companies that sell products in
China as well as China's economy.
The Dow Jones Industrial Average rose 646.95 points,
or 1.87%, to 35,227.03, the S&P 500 gained 53.24 points,
or 1.17%, to 4,591.67 and the Nasdaq Composite added
139.68 points, or 0.93%, to 15,225.15.
The S&P 500 Value Index rose 1.5%, outperforming its
growth counterpart, which gained 0.9%.
The economically sensitive Dow Jones Transportation index
outperformed the broader market with a 2.3% gain while
the small-cap Russell 2000 climbed 2%.
Wall Street's major indexes have been swinging wildly since
Nov. 26 as investors digested news of the COVID-19 Omicron
variant and then Federal Reserve Chair Jerome Powell's hawkish
comments last week about a speedier tapering of government
bond-buying to tackle surging inflation.
The S&P's finish on Monday was 2.3% below where it traded
before investors started reacting to the Omicron virus.
"If today's strength in the blue chips can sort of sustain
itself, that might give the rest of the market the ability to
start to feel confident," said Robert Pavlik, senior portfolio
manager at Dakota Wealth Management.
Still, Goldman Sachs on Saturday cut its outlook for U.S.
economic growth to 3.8% for 2022, citing risks and uncertainty
around the emergence of Omicron. Investors had also been bracing
for a potential hit to corporate earnings, particularly among
retailers, restaurants and travel companies.
The industrials sector's three biggest percentage gainers
were airlines led by United Airlines 8.3% gain while the S&P
Airline's index closed up 5.5%.
Other strong gainers in travel related stocks included
Norwegian Cruise Line Holdings, which finished up 9.5%.
Vacation rental company Airbnb added 8.5%.
Big decliners included COVID-19 vaccine makers such as
Moderna Inc, down 13.5%, and Pfizer, down 5%,
as investors anticipated development of vaccines with
protections specific to Omicron could take months.
Nvidia closed down 2%. Investors have been worried
about the outcome of regulatory scrutiny of its deal to buy
British chip firm ARM Ltd.
Kohl's Corp shares closed up 5.4% after hedge fund
Engine Capital LP said it was pushing the department-store chain
to consider a sale of the company or separate its e-commerce
division to improve its lagging stock price.
JJ Kinahan, chief market strategist at TD Ameritrade, said
investors may be preparing for a Dec. 17 expiration of options
"You have a lot of firms that have a double mandate right
now. You are trying to take off risk, expiration related, while
the same time rebalancing your portfolio heading into 2022," he
Advancing issues outnumbered declining ones on the NYSE by a
2.82-to-1 ratio; on Nasdaq, a 1.71-to-1 ratio favored advancers.
The S&P 500 posted 20 new 52-week highs and one new low; the
Nasdaq Composite recorded 28 new highs and 600 new lows.
On U.S. exchanges, 11.96 billion shares changed hands
compared with the 11.55 billion average for the last 20
(Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru;
Alden Bentley and Sinéad Carew in New York, Editing by Maju
Samuel, Shounak Dasgupta and Cynthia Osterman)