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By Sinéad Carew and Kevin Buckland
(Reuters) - Wall Street stocks closed higher on Monday, regaining some of the ground they lost in Friday's sell-off, as investors were hopeful that the Omicron coronavirus variant would not lead to lockdowns after reassurance from U.S. President Joe Biden.
The Nasdaq led gains among the major averages with help from the technology sector, while the S&P and the Dow advanced after suffering their biggest one-day percentage declines in months in Friday's holiday-shortened session as investors worried that the latest COVID-19 variant would cause economic disruption.
Biden said on Monday that Omicron-related lockdowns were off the table for now and he urged Americans not to panic about the variant. However, he did recommend vaccination and mask wearing indoors to combat the virus and said the United States was working with pharmaceutical companies to make contingency plans if new vaccines were needed.
Those comments and indications from drug companies that they are taking the variant seriously were reassuring for investors, who had been anxious about the potential for further COVID restrictions.
"Friday was a major de-risking event. You had the market go back to its worst fears of COVID spreading and the return of lockdowns," said Edward Moya, senior market analyst at OANDA.
"Now you're starting to see there is some optimism when you listen to the President, when you listen to the Pfizer CEO. The Omicron panic is easing, and we're into a period of wait and see."
Vaccine makers such as Pfizer, its partner BioNTech and their rivals Moderna and Johnson & Johnson said Monday they are working on vaccines that specifically target Omicron in case existing shots are not effective against the variant. nFWN2SK0VH]
"It's not like the start of the pandemic all over again," said Carol Schleif, deputy chief investment officer for the BMO family office in Minneapolis who also noted that after Friday's knee-jerk reaction, investors have been trained this year to buy the dip. "People are willing to just take a deep breath and try to reassess, be a little more patient."
The Dow Jones Industrial Average rose 236.6 points, or 0.68%, to 35,135.94, the S&P 500 gained 60.65 points, or 1.32%, to 4,655.27 and the Nasdaq Composite added 291.18 points, or 1.88%, to 15,782.83.
Among the S&P's 11 major sectors, technology was the leading percentage gainer, up 2.6%, followed by the consumer discretionary sector, which closed up 1.6%, with boosts from Amazon.com and Tesla Inc.