By Jessica DiNapoli
NEW YORK (Reuters) -U.S. stock indexes closed broadly higher on Wednesday after investors cheered positive economic data and the White House said it was resuming talks on a massive social spending and climate change bill with a holdout senator.
The market gained throughout the trading session, overcoming fears about the Omicron COVID-19 variant, and was pushed upward by improving consumer confidence and gross domestic product growth. The positive swing continued Tuesday's trend, when stocks recouped losses.
"With COVID fears, there’s not as much worry as before," said Anu Gaggar, global investment strategist for Commonwealth Financial Network. "It may not have as much of an impact on the economy. (U.S. President Joe) Biden has said we won’t go back to lockdown."
The White House said on Wednesday that it would continue talks with Senator Joe Manchin, who delivered what appeared to be a fatal blow to Biden's Build Back Better bill over the weekend by saying he would not support it.
Gaggar added that volatility in December has been much higher than usually seen, and that her conviction is that the "Santa Claus rally is slightly lower this year.”
The so-called "Santa Claus rally" is the last five trading days of the year and the first two of the next year, when stocks often are higher. According to an article from LPL Financial, if Santa does not come, it could portend a bear market.
Riskier currencies such as the Australian dollar and the euro recovered against the U.S. dollar on Tuesday, while U.S. Treasury traders discounted the threat of long-term inflation as the yield curve flattened.
The Dow Jones Industrial Average rose or 0.74% to 35,753.89, while the S&P 500 gained 1.02% to 4,696.56. The Nasdaq Composite added 1.18%, to 15,521.89.
MSCI's gauge of stocks across the globe gained 0.94%.
Oil prices climbed as fears of tight supply and drawdowns in the United States offset concerns about COVID-19 dampening demand. U.S. crude recently rose 2.66% to $73.01 per barrel and Brent was at $75.56, up 2.14% on the day.
Little is known about the severity or transmissibility of the Omicron variant, but top U.S. infectious disease expert Anthony Fauci said on Wednesday that holiday gatherings of over 40 people are not safe even for people who are vaccinated and got a booster dose.
Meanwhile, Biden warned Americans about the risks of being unvaccinated - saying it "can be the difference between life and death" - and brought military personnel to support overwhelmed hospitals.
The United States also authorized Pfizer Inc (NYSE:PFE)'s antiviral COVID-19 pill for at-risk people aged 12 and above.
Currency market moves were generally muted as trading slowed before the Christmas holidays. The dollar index fell 0.375%.
Elsewhere, cryptocurrencies slipped slightly, with bitcoin roughly flat at $48,937.70, still well below the all-time high of $69,000 hit in November.