Tech Shares Finish Higher in Broad Stock Rally

The last five trading days of the year and the first two trading days of the new year comprise the “Santa Claus Rally” in trading lore, as detailed in “Stock Trader’s Almanac.” It isn’t a big rally, on average adding about 1.3%, but it is consistent, showing up about 80% of the time.

That holiday spirit is dovetailing with a growing perception that the risks from the Omicron variant of Covid-19 may not be as severe as initially feared, which is coming as a relief to investors, said Jason Pride, the chief investment officer of private wealth at asset management firm Glenmede. “I think the market is taking note of what was the previous risk basically being pared back,” he said.

Markets sagged in recent weeks over concerns that the rapid spread of the Omicron variant could harm the economy as countries undertook various measures to stem its spread. Some investors now expect Omicron will be mitigated by vaccines and the rollout of booster shots in some nations.

“Everything seems to be serious but manageable. Anything that changes that, this could probably make a big impact,” said Luca Paolini, chief strategist at Pictet Asset Management.

Market moves can be amplified during the holiday season due to a lack of liquidity, or how readily buyers and sellers can find each other. With many traders off, prices people are willing to buy and sell at may be higher or lower because there are fewer counterparties. 

“We are in kind of this Christmas trading range, but low liquidity makes any potential shock bigger,” Mr. Paolini added. 

Some companies however were still being affected by the pandemic. Flight cancellations marred Christmas weekend for many travelers, as Covid-19 left carriers short-staffed to operate busy schedules over the holiday. United Airlines Holdings declined 0.7% to $44.58 and American Airlines Group shed 0.5% to $18.17.

GoDaddy shares added 8.4% to $82.35 after The Wall Street Journal reported that activist investor Starboard Value has a sizable stake in the domain registrar and plans to push it to boost its performance.

Meanwhile, investors kept an eye on Apple’s shares, waiting to see if the company’s market capitalization would hit the $3 trillion mark. While the stock closed up 2.3% at $180.33, that was below the $182.856 it will need to price for the market cap to hit $3 trillion. Apple would be the first company in history with such a rich valuation.

The gain gave a boost to the tech sector. Other tech gainers included Microsoft, up 2.3% to $342.45, Nvidia, up 4.4% to $309.45, and Cisco, up 1.8% to $63.42.

Electric-auto maker Tesla, which trades in the consumer discretionary group, climbed 2.5% to $1,093.94.

In currencies, the Turkish lira fell 7.3% against the dollar. The lira, one of this year’s worst-performing emerging-market currencies, recouped some losses last week after the nation’s president announced a rescue plan to encourage Turks to put their money back into the lira. Foreign investors are waiting to see if the plan marks a larger reversal in its weakness or if broader concerns over high inflation cause it to depreciate again. 

In bond markets, the yield on the benchmark 10-year Treasury note ticked down to 1.480% from 1.492% Thursday. Yields and prices move inversely. 

Commodities prices were generally higher, benefiting from expectations of a stronger economy in 2022. U.S. crude-oil futures rose 2.4% to $75.57. Lumber added 4.1% and soybean futures were up 2.3%. Natural-gas prices rose 8.8% after forecasts of colder weather in parts of the U.S., which could spur demand for heating fuel.

Overseas, the pan-continental Stoxx Europe 600 rose 0.6%. Markets in the U.K. were closed.

In Asia, China’s Shanghai Composite closed almost 0.1% lower. South Korea’s Kospi and Japan’s Nikkei 225 each declined 0.4%. Markets in Hong Kong and Australia were closed. 

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Paul Vigna at Paul.Vigna@wsj.com