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Inventory futures rise after the massive sell-off on Friday, traders are watching Omicron's Covid variant

A trader on the floor of the New York Stock Exchange (NYSE) on Thursday, November 18, 2021.

Michael Nagel | Bloomberg | Getty Images

Stock futures rose in overnight trading on Sunday after the big sell-off on Friday as investors watch the latest developments related to the Covid-Omicron variant.

Futures on the Dow Jones Industrial Average gained 243 points, or 0.7%. S&P 500 futures gained 0.96% and Nasdaq 100 futures rose 1.19%.

Stocks come from a holiday-cut session on Friday when the Dow had its worst day since October 2020. The Dow lost 905 points, or 2.5%. The S&P 500 lost 2.3% and the Nasdaq Composite lost 2.2%. The three main indices were negative for the week.

“The pandemic and COVID variants remain one of the greatest risks to the markets and are likely to continue to create volatility for the next few years. It's hard to say right now how sustainable or effective this newest twist will be in the markets. "Keith Lerner, Co-Chief Investment Officer at Truist Advisory Services, said in a note Friday.

The World Health Organization called the Omicron strain a "worrying variant" on Friday. While scientists continue to research the variant, the large number of mutations in omicron has sounded the alarm. Preliminary evidence suggests that the strain has an increased risk of reinfection, according to the WHO.

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The variant was first reported to the WHO from South Africa and has been found in the UK, Israel, Belgium, the Netherlands, Germany, Italy, Australia and Hong Kong, but not yet in the US.Many countries, including the US, have moved out of the country after traveling restrict southern Africa.

Vaccine manufacturers have announced measures to investigate Omicron, with testing already ongoing. It remains to be seen how Omicron will respond to current vaccines or whether new formulations will be required, but Moderna's chief medical officer Paul Burton said Sunday the vaccine maker could launch a reformulated vaccine against the Omicron variant early next year.

In addition to Covid developments, investors can also expect key economic data to be released this week.

Friday's November jobs report is expected to show solid employment growth. Economists polled by Dow Jones expect 581,000 new jobs in November.

The Institute of Supply Management industry survey is due out Wednesday, and economists expect strong results as well.

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