By Yasin Ebrahim

Investing.com – The S&P 500 clawed back some losses Thursday, bouncing back from oversold levels following a rout a day earlier after the U.S. confirmed its first case of the Omicron variant of Covid-19.

It rose 1.50% and gained 1.94% or 660 points.

“Yesterday’s bearish reversal pushes U.S. equities into oversold territory once again and sets us up for another strong rally effort,” Janney Montgomery Scott said in a note. But there is “likely (still) more to go in this current market correction.”

The financial market outperformed the wider market. This was led by banks stocks. Treasury yields rose as some Wall Street analysts suggested that there could be a more contagious variant of the pandemic, which would accelerate the ending.

“If the market were to anticipate that scenario — omicron could be a catalyst for steepening (not flattening) the yield curve, rotation from growth to value, selloff in COVID and lockdown beneficiaries and rally in reopening themes,” chief global strategist Marko Kolanovic and quant strategist Bram Kaplan wrote in a note to clients.

Regional banks including Fifth Third (NASDAQ:), People’s United Financial (NASDAQ:), and SVB Financial (NASDAQ:) were among the biggest gainers in financial, rising more than 5%.

A rebound in airline stocks led by Boeing Co (NYSE:) China cleared the aircraft maker’s 737 Max to return to the skies on Thursday.  China has restored the 737 Max to flight service after it was grounded for two years due to two fatal crashes.

Delta Air Lines (NYSE:), Alaska Air (NYSE:), United Airlines Holdings Inc.

The rising price of oil has helped boost energy stocks. OPEC, its allies and partners have decided not to alter their January plan which saw them increase oil production by 400,000 barrels per hour.

On the economic front, better-than-expected weekly jobless claims data stoked optimism on the labor market recovery ahead of Friday’s monthly jobs.

The Labor Department reported that 222,000 people filed for unemployment insurance, confounding economists’ expectations for an 18,000 rise.

In November, nonfarm payrolls were expected to increase by 560,000 and the unemployment rate to plummet to 4.4%.

Apple (NASDAQ) reported that tech company Apple has recouped some of its losses following a warning from its chip supplier about a weaker demand. Bloomberg reported.