BANGKOK (AP) — Stocks advanced Wednesday in Asia after another broad rally on Wall Street as investors wagered that the new variant of the COVID-19 virus won’t pose a big threat to the economy.
Shares rose in Tokyo, Hong Kong, Shanghai and Seoul. Oil prices edged lower.
Japan downgraded its growth estimate for the last quarter to minus 3.6% from an earlier reported contraction of 3.0%. The change reflected weaker consumer and public demand and trade and lower levels of private inventories.
Economists are forecasting a rebound in the current quarter, thanks to a recovery in activity as coronavirus caseloads plummeted.
Parliament is expected to approve a proposed record stimulus package of 56 trillion yen ($490 billion), including cash handouts and aid to ailing businesses, to help the economy out of the doldrums worsened by the coronavirus pandemic.
Tokyo's Nikkei 225 index gained 1.5% to 28,872.82 and the Shanghai Composite index climbed 0.9% to 3,626.11. Hong Kong's Hang Seng was little changed at 23,977.24.
In Australia, the S&P/ASX 200 jumped 1.2% to 7,398.90, while the Kospi in South Korea surged 0.8% to 3,016.25.
On Tuesday, the S&P 500 rose 2.1% for its biggest gain since March, ending at 4,686.75. The Nasdaq climbed 3% to 15,686.92 and the Dow Jones Industrials rose 1.4% to 35,719.43.
Smaller company stocks did better than the broader market in a sign that investors are confident about economic growth. The Russell 2000 gained 2.3% to 2,253.79.
The rebound this week comes after the market posted two losing weeks in a row, weighed down by concerns over the spread of the omicron variant of COVID-19, mixed data on the job market and worries about inflation.
Comments Monday from Dr. Anthony Fauci, the White House’s chief medical adviser, who said early indications suggest the omicron variant of coronavirus may be less dangerous than the delta variant have encouraged investors.
It will take a few more weeks to learn whether omicron is more contagious, causes more severe illness or evades immunity.
Technology stocks accounted for a big share of gains as investors focused on sectors poised to benefit the most from solid economic growth that are considered riskier bets. Apple rose 3.5% and Microsoft rose 2.7%.
Intel rose 3.1% after saying it plans to take its Mobileye self-driving car unit public in 2022.
A broad range of retailers and other companies that rely on direct consumer spending also made solid gains. Amazon.com rose 2.8%, Starbucks gained 2.6% and General Motors rose 2.8%.
Financial stocks also helped lift the market, getting a boost from rising bond yields. Wells Fargo rose 3%.
Energy futures mostly rose, with the price of U.S. crude oil jumping 3.7% to $72.05 per barrel. That helped lift the S&P 500′s energy sector, which has already outpaced the 10 other sectors with a 50.7% gain so far this year.
On Wednesday, oil prices fell back, with U.S. benchmark crude losing 29 cents to $71.76 per barrel. Brent crude, the standard for pricing international oils, gave up 30 cents to $75.14 per barrel.
The yield on the 10-year Treasury slipped to 1.46% from 1.48% late Tuesday. It fell to 1.34% on Friday as anxious investors sold stocks and piled into bonds.
Beyond any lingering uncertainty over omicron, Wall Street is looking ahead to next week, when the Federal Reserve is scheduled to hold a two-day meeting of policymakers that could offer an update on the central bank’s plans to tackle inflation. The Fed has said it plans to speed up the pace at which it trims its bond purchases, which have helped keep interest rates low. That has raised concerns that the Fed will raise its benchmark interest rates next year sooner than expected.
In currency trading, the U.S. dollar slipped to 113.48 Japanese yen from 113.59 yen. The euro rose to $1.1292 from $1.1270.
AP Business Writers Alex Veiga and Damian J. Troise contributed.