Why Alibaba Shares Rallied Today

Shares of several Chinese stocks, including Alibaba Group Holding Ltd BABA, traded higher Tuesday amid signs of policy easing and a rebound across sectors as COVID-19 omicron variant fears eased.

The COVID-19 omicron variant has now been detected in at least 45 U.S. states and the U.S. is now reportedly averaging about 130,000 new COVID-19 cases each day, representing about a 10% increase compared to last week.

Health officials have warned that the surge in COVID-19 cases could continue as people begin traveling for the holidays due to the omicron variant's heightened transmissibility.

However, U.S. President Joe Biden reassured vaccinated Americans that they can proceed with holiday plans in a White House Speech Tuesday.

"I know some Americans are wondering if you can safely celebrate the holidays with your family and friends. The answer is, yes you can if you and those you celebrate with are vaccinated, particularly if you've gotten your booster shot," Biden said.

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Alibaba shares showed resilience Tuesday, rallying about 7% following a downgrade from Atlantic Equities. 

Atlantic Equities analyst James Cordwell downgraded Alibaba from an Overweight rating to a Neutral rating and lowered the price target from $185 to $140.

Alibaba operates China's online marketplaces, including Taobao (consumer-to-consumer) and Tmall (business-to-consumer).

BABA Price Action: Alibaba has traded as high as $274.29 and as low as $108.70 over a 52-week period.

The stock closed up 6.94% at $122.98 on Tuesday.

Photo: courtesy of Alibaba.