Asian shares mixed, oil gains after rally on Wall Street

TOKYO (AP) — Asian shares were mixed Tuesday, as worries in the region about the coronavirus omicron variant tempered market optimism set off by a rally on Wall Street.

Japan’s benchmark Nikkei 225 jumped 1.7% in morning trading to 29,278.31 as markets reopened after the New Year holidays. Among the gainers were Toyota Motor Corp., Sony Corp. and SoftBank Group Corp.

Finance Minister Shunichi Suzuki and other dignitaries rang a bell at the Tokyo Stock Exchange to herald the opening of trading for 2022. At the smaller exchange in Osaka, in western Japan, women carried on the tradition of attending the year’s opening ceremony in colorful kimono.

Australia’s S&P/ASX 200 jumped 1.7% to 7,570.00. South Korea’s Kospi slipped 0.3% to 2,979.23. Hong Kong’s Hang Seng dropped 0.3% to 23,206.26. The Shanghai Composite edged down 0.4% to 3,627.10.

Coronavirus infections and deaths have been fewer in Asia than in the U.S. and parts of Europe. But worries are growing about an inevitable surge with reported detections of faster spreading omicron.

“While sentiments may attempt to ride on the optimism from Wall Street, market participants have generally been more cautious in taking on more risks in the region,” said Yeap Jun Rong, market strategist at IG in Singapore.

Some experts say Japan’s economy will recover this year, while others are more pessimistic, pointing to long-term social causes that have held back innovation in the world’s third largest economy for years, even before COVID-19 struck.

Wall Street got 2022 off to a solid start with more record highs for the S&P 500 and the Dow Jones Industrial Average. The S&P 500 rose 0.6% to 4,796.56 and the Dow finished 0.7% higher, at 36,585.06. Both indexes eclipsed the record highs they set last Wednesday. The Nasdaq composite rose 1.2% to 15,832.80.

Smaller company stocks also rose. The Russell 2000 gained 1.2% to 2,272.56.

Technology stocks and a mix of retailers and other companies that rely on consumer spending accounted for a big share of the gains. Apple rose 2.5%, closing just shy of becoming the first company to hit a market capitalization of $3 trillion. It briefly traded above that level during the day.

Tesla jumped 13.5% for the biggest gain in the S&P 500 after after reporting strong delivery numbers for 2021.

Bond yields rose significantly. The yield on the 10-year Treasury rose to 1.64% from 1.51% Friday. That helped push up shares in banks, which rely on higher yields to charge more lucrative interest on loans. Bank of America rose 3.8%.

The market’s solid start to 2022 follows another banner year for stocks on Wall Street. The S&P 500 closed out 2021 with a 26.9% gain, or a total return of 28.7%, including dividends. That’s nearly as much as the benchmark index gained in 2019.

The S&P 500’s latest milestones, following up on the 70 record highs it posted last year, are a sign investors remain bullish about stocks, despite the recent spike in COVID-19 cases from virus’ fast-spreading omicron variant and expectations that the Federal Reserve will begin pushing up interest rates sometime this year to fight rising inflation.

“It’s been going on for months and months. We’ve had all-time highs and we keep hitting them,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “When you still have a low interest rate environment, which we do, at least for now, (stocks) are the place to be.”

While the strength in technology companies drove the S&P 500 overall higher Monday, the number of stocks in the index that rose were just about even with decliners.

Health care companies fell broadly and kept gains elsewhere in the market in check. Pfizer shed 4.1% despite news that the U.S. expanded use its COVID-19 booster shots for children as young as 12.

Industrial stocks also fell. Union Pacific, a railroad operator, slid 1.7%.

Investors have several key pieces of economic data to look forward to during the first week of the new year. The Institute for Supply Management will give investors an update on the manufacturing sector on Tuesday and the services sector on Thursday.

One big event on the U.S. economic calendar this week is the Labor Department’s jobs report on Friday.

In energy trading, benchmark U.S. crude rose 26 cents to $76.34 a barrel in electronic trading on the New York Mercantile Exchange. It gained 87 cents to $76.08 per barrel on Monday. Brent crude, the international standard, added 35 cents to $79.33 a barrel.

In currency trading, the U.S. dollar rose to 115.74 Japanese yen from 115.31 yen. The euro cost $1.1302, inching up from $1.1296.

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AP Business Writers Damian J. Troise and Alex Veiga contributed.

Copyright © 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.

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