Ms. Daly said she was "quite supportive" of the Fed's decision last month to speed the so-called taper of asset buying. If the Fed maintains the new pace of the drawdown, it would bring the purchases that expand Fed holdings to a close by March.

Omicron Comes to China, Prompting Mass Testing and Quarantines

HONG KONG-Chinese health authorities confirmed the country's first cases of domestic transmission of the Omicron variant of the coronavirus in the northern coastal city of Tianjin on Sunday, ordering up testing of millions of residents weeks before neighboring Beijing is set to host the Winter Olympics.

Two Covid-19 infections were confirmed as Omicron cases by the Chinese Center for Disease Control and Prevention and its Tianjin branch after genome sequencing, according to state broadcaster China Central Television. Officials said it wasn't confirmed if the cases were linked to imported cases found in Tianjin late last year, CCTV reported.

U.S. Covid-19 Seven-Day Case Average Tops 700,000

The seven-day average for newly reported cases in the U.S. topped 700,000 for the first time, data from Johns Hopkins University show, as the highly infectious Omicron variant spreads throughout the country.

The average of known cases could soon triple the pre-Omicron record set a year ago, when the U.S. briefly saw about a quarter million daily cases. The numbers reported by state health departments and collected by Johns Hopkins also likely reflect a fraction of the true number, due in part to Omicron's rapid spread and the difficulty many Americans have had getting tested. Some laboratories are limiting test-processing to certain people such as those with symptoms because of the surge in demand.

Earnings Reports This Week Will Help Investors Prep Their 2022 Playbooks

Earnings season kicks off this week, the next test for a stock market rattled by the prospect of quicker interest-rate increases by the Federal Reserve.

The market fell Wednesday on news that the Fed might lift short-term interest rates as soon as March, and it extended its decline throughout the week. The S&P 500, which soared 27% in 2021, fell 1.9% in the first week of the new year. The tech-heavy Nasdaq Composite recorded its worst week since February. The yield on the 10-year U.S. Treasury note rose to 1.769%, its highest since January 2020.

Russia Readies Scores of Transport Planes as Troops Pour Into Kazakhstan

Russia sent fresh reinforcements into Kazakhstan on Sunday, deploying troops to help authorities reassert control in the country's biggest cities following days of sometimes violent protests against its leadership.

The Russian Defense Ministry said it had prepared a contingent of more than 75 transport planes to allow for continuous deployment of troops into the country. The number sent in would likely be around 2,500, but could go higher, Russian state news agency RIA said last week.

U.S. Offers Russia Dialogue, Eyes Sanctions if Ukraine Is Invaded

WASHINGTON-As the Biden administration and U.S. allies begin contentious talks with Moscow this week, Western officials are eyeing significant financial punishments and targeted technology sanctions if Russia sends troops across the Ukrainian border, while likely avoiding the broadest energy and bank sanctions, according to people familiar with the matter.

To encourage Russian President Vladimir Putin to de-escalate the situation, the Biden administration is also prepared to discuss limits on intermediate-range missiles in Europe as well as reciprocal restrictions on the scope of military exercises on the continent, U.S. officials said.

U.S. to Discuss Scaling Back Military Exercises, Missile Deployments in Europe in Monday's Russia Talks

WASHINGTON-The Biden administration is ready to discuss the deployment of U.S. missiles in Europe as well as reciprocal restrictions on the size and scope of military exercises on the continent when it meets on Monday with Russian negotiators in Geneva, U.S. officials said.

The Biden administration's efforts are an attempt to defuse tensions with Russia, which has deployed about 100,000 troops near Ukraine's border. But they fall far short of Moscow's demands that the North Atlantic Treaty Organization call a halt to its eastward expansion, and cease training, exercises and military support to Ukraine and other parts of the former Soviet Union.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

01-10-22 0625ET