US stock futures edge up, as investors cheer positive Omicron and economic data ahead of holidays

• US stock futures rose Thursday as data showed Omicron's impact may not be as bad as feared.
• The US economy grew at an annual 2.3% pace in the third quarter, while consumer confidence improved in December.
• Airlines were among the best-performing stocks in Europe, with British Airways' parent IAG rising 4.5%.

US stocks are poised to attempt a third day of gains Thursday, part of a global rally driven by investors taking heart from positive reports on the impact of the Omicron coronavirus variant.

Futures on the Dow Jones and S&P 500 were 0.27% higher as of 6:45 a.m. ET, while Nasdaq futures were up 0.17%, suggesting a modestly higher start at the open later in the day. Stocks surged for a second day on Wednesday, with Tesla and Pfizer on the rise.

Trading was thin, with low liquidity, ahead of the holidays. The US stock and bond markets will be closed Friday.

Markets also got some uplift from positive US data out on Wednesday. Official figures showed US consumer confidence improved in December, suggesting the economy will keep growing in the first quarter of 2022.

Commerce Department figures Wednesday indicated GDP grew 2.3% year-on-year in the third quarter, up from a previous estimate of 2.1%. But it was still lower than the 6.7% jump for the second quarter.

Stocks and other assets have had a bumpy ride since the detection of Omicron in late November, as markets swayed in response to fresh headlines. But fears about the impact of the new virus strain on economies cooled in the wake of positive news on Wednesday.

Research by Imperial College, London suggests people infected with Omicron may experience a milder illness than with the Delta variant. It found Omicron infections carry a 15% to 20% lower risk of hospitalization.

Meanwhile, a study by South Africa's National Institute for Communicable Diseases showed the Omicron variant carries an 80% lower rate of hospital admissions.

"A cocktail containing better US Q3 GDP data, along with positive omicron headlines further inoculated financial markets against a year-end sell-off overnight," Jeffrey Halley, a senior market analyst at OANDA, said in a note.

In Europe, the pan-continental Euro Stoxx 600 was 0.6% higher in early Thursday trading, while Frankfurt's DAX rose 0.6%.

London's FTSE 100 added 0.25%, after Prime Minister Boris Johnson said no new UK restrictions will be brought in before Christmas. Daily COVID-19 cases in the UK rose above 100,000 for the first time on Wednesday.

Airlines were among the best-performing stocks, with British Airways parent IAG and Hungarian budget carrier Wizz Air jumping more than 4.5% each in mid-morning trade.

In China, the city of Xian was locked down, in its biggest shutdown since the pandemic started, after logging 127 COVID-19 cases. But it had no noticeable impact on regional markets, which appeared to be driven by positive news elsewhere.

The Shanghai Composite gained 0.5%, and Hong Kong's Hang Seng rose 0.4%. Tokyo's Nikkei closed 0.8% higher.

Oil prices rallied overnight as the Omicron news gave hope for future demand. Also helping was larger-than-expected drawdown in US inventories, with crude stocks down by 4.7 million barrels.

Brent crude futures last traded 0.3% higher at $75.56 a barrel, and West Texas Intermediate rose 0.4% to $73.07 a barrel.

The US dollar was about flat, inching up by just 0.09% to 96.16.

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