U.S. markets posted gains Tuesday, bouncing back after three negative sessions fueled by concerns over the rapidly spreading Omicron COVID-19 variant. Photo by John Angelillo/UPI | License Photo
Dec. 21 (UPI) -- The Dow Jones Industrial Average gained 560 points on Tuesday as markets bounced back after three consecutive days of losses brought on by concerns related to the COVID-19 Omicron variant.
The blue-chip index gained 1.6% at the end of trading Tuesday, while the broader S&P 500 rose 1.78% and the tech-heavy Nasdaq Composite closed the day up 2.4%.
Markets got a boost as President Joe Biden outlined his administration's plans to deal with the Omicron surge, including stepping up vaccination efforts, sending 1,000 military medical personnel to back up hospitals and purchasing 500 million at-home COVID-19 tests to send to Americans who request them beginning in 2022.
Tuesday's gains came after the Dow lost more than 1,000 points in the previous three sessions.
Timothy Lesko, principal at Granite Investment Advisors, told CNBC that markets "could see a rally" if Omicron-induced illness turns out to be milder than other variants.
"The market seems to be reacting to a short-term oversold position," said Lesko. "Omicron and its unknown effect is creating significant volatility. Bonds were over bought, stocks were over sold and now we seek to find answers."
The 10-year treasury yield bounced back to near 1.5% and oil prices also rebounded 2.5% to above $70 per barrel.
Stocks that would benefit from widespread economic reopening such as travel and entertainment stocks saw gains Tuesday as Carnival Cruise Line gained 8.73%, United Airlines rose 6.89% and Delta increased 5.91%.
Rite Aid stock shot up 21.27% after the pharmacy chain announced it would close up to 63 underperforming locations in the coming months.
Conversely, shares of Pfizer fell 3.39% and Merck dropped 1.14% amid expectations that the Food and Drug Administration will approve at-home COVID-19 treatment pills from the two drugmakers.
Elsewhere semiconductor companies saw a boost as Micron stock rose 10.54%, AMD stock gained 6.22% and NXP Semiconductors increased 3.09%.
Nike shares gained 6.2% after posting better-than-expected earnings, while Macy's stock rose 5.39% amid broad gains for retailers.