Wall Street Opens Higher as Micron Earnings Reassure; Dow up 220 Pts

U.S. stock markets opened higher on Tuesday as strong earnings from Micron (NASDAQ:MU) helped strengthen a sense that Monday’s sell-off was overdone, and that the fundamental outlook for next year is still positive.

The market shrugged off figures showing new Covid-19 infections rising to a new record high in the U.S. at 298,000 on Monday. So far, there has been no notable pickup in hospital admissions, as the virulent Delta strain yields to the more transmissible – but seemingly less dangerous – Omicron variant. The Centers for Disease Control estimate that Omicron now accounts for nearly three-quarters of U.S. infections. Vaccine makers were the biggest losers in early trade, Pfizer (NYSE:PFE) stock and Moderna (NASDAQ:MRNA) stock both losing 6.1% and Novavax (NASDAQ:NVAX) stock losing another 11%.

By 9:55 AM ET (1455 GMT), the Dow Jones Industrial Average rose 267 points, or 0.8% at 35,199 points. The S&P 500 was up 0.6% and the Nasdaq Composite was up 0.5%.

Late on Monday, Micron had reported sharply higher-than-expected earnings and raised its guidance, citing sustained strong demand from the data center and electric vehicle sectors in particular. That was taken as a sign that at least two of the fundamental growth drivers that have supported in recent months are still intact, even through the breadth of the market rally has narrowed considerably.

Micron stock was up 8.7% in early trading, but there was only limited support for other chipmakers: Advanced Micro Devices (NASDAQ:AMD) stock rose 1.0% and Nvidia (NASDAQ:NVDA) stock rose 0.9%.

Nike (NYSE:NKE) stock was another to advance after reporting earnings late on Monday, gaining 5.3% even though its update still smacked of supply chain constraints due to factory closures in Vietnam. Sales in China were down 20% due to a lack of product availability and signs of local aversion to the brand over the controversy about its alleged use of suppliers in the province of Xinjiang. General Mills (NYSE:GIS) stock fell 4.1% after its supply chain constraints and higher input costs caused it to miss quarterly profit estimates by a wide margin.

In a market slowly starting to thin out between the expiry of December options contracts on Friday and the upcoming Christmas holiday, reopening plays outperformed after underperforming on the way down on Monday. American Airlines (NASDAQ:AAL) stock rose 5.6% and United Airlines (NASDAQ:UAL) stock rose 5.9% after data from the TSA showed passenger traffic still holding up despite the latest wave of coronavirus infections.

Elsewhere, the settlement of SEC charges that it misled investors wasn’t enough to generate any noticeable momentum for electric truck maker Nikola. Despite gaining over 3% in the premarket session, Nikola (NASDAQ:NKLA) stock could only add 0.6% in early trade.