Market Snapshot: Stocks shrug off China virus fears to new intraday highs

Market Snapshot: Stocks shrug off China virus fears to new intraday highs

22 Jan    Finance News

U.S. stocks pushed higher Wednesday, with major benchmarks touching new intraday records, after Chinese authorities provided assurance they were taking steps to contain a possible coronavirus pandemic, relieving investor fears about a threat to global economic growth.

What are major indexes doing?

The Dow Jones Industrial Average DJIA, +0.25%   was up 36 points, or 0.1%, at 29,231 midday, while the S&P 500 SPX, +0.31%  gained 8 points, or 0.3%, to 3,329. The Nasdaq Composite Index COMP, +0.58%   was up 49 points or 0.5%, at 9,420 midday.

On Tuesday, the Dow DJIA, +0.25% shed 152.06 points, or 0.5%, to 29,196.04, ending its five-day streak of gains. The S&P 500 index SPX, +0.31% fell 8.83 points, or 0.3%, to 3,320.79 and the Nasdaq Composite Index COMP, +0.58% closed down 18.14 points, or 0.2%, at 9,370.81, after briefly turning positive mid-session to set a record intraday high of 9,397.58.

What’s driving the market?

Major stock indexes finished lower on Tuesday, pulling back from records seen last week, after a U.S. citizen who had recently returned from a trip to central China was diagnosed with the new virus that’s raised worries over a potential pandemic. However, analysts said recent updates from Chinese authorities provided some comfort the outbreak will be contained.

“It seems that risk sentiment is considering much of the widespread news and talk of a potential SARS 2003 outbreak as predominantly fear mongering, and that the situation will eventually return to normal, as it has historically,” said Bethel Loh, macro strategist at ThinkMarkets, in a note.

“This has driven investors to use yesterday’s broad selloff as an opportunity to get their positioning right as earnings season gets under way,” Loh said.

See also  Stocks Ripe for a Pullback, Says HSBC’s Kettner

Read: China’s new coronavirus cases rise sharply to 400, as death toll rises to 9

Also see: Why the mysterious coronavirus from China has spread so quickly

Chinese officials said hospitals are stepping up preventive measures and moving to discourage movement into and out of Wuhan, the central Chinese city where the virus originated, The Wall Street Journal reported.

DJIA, +0.25% The Dow has risen for five of the past six weeks, with a year-to-date return in 2020 of 2.3%. The S&P 500 has gained for two consecutive weeks, with a year-to-date return of 2.8% and the Nasdaq has risen for six straight weeks, with a year-to-date return of 4.4%.

In U.S. economic news, sales of previously-owned homes surged nearly 4% in December, confirming the rebound in the sector that many analysts believe will bolster economic growth in 2020.

Which companies are in focus?

IBM IBM, +3.23%   shares climbed more than 3% after reporting earnings and an outlook that came as a positive surprise for analysts.

Netflix Inc. NFLX, -3.01%  late Tuesday reported a boost to revenue and global net subscriber growth at the end of 2019, but offered a weak outlook for the start of 2020. Shares were off 2.6% at midday.

Boeing Company BA, -1.63%  was off 2.5% and was a drag on the Dow, a day after the airplane manufacturer confirmed its 737 Max wouldn’t be up and running until mid-2020.

Dow-component Johnson & Johnson JNJ, -0.49% early Wednesday reported a fourth-quarter profit that beat expectations, though revenue came up a bit shy. Shares slid 1%.

See also  Dispatches from a Pandemic: ‘I’m not going to be rich, but I can manage to live.’ Meet the hospital cleaner on the frontlines of the coronavirus pandemic

United Airlines Holdings UAL, -1.46%  late Tuesday reported results that beat Wall Street’s adjusted profit expectations in the fourth quarter. The stock slipped 1.5%

Tesla Inc. TSLA, +7.18%   shares jumped 7% after an analyst upped his price target by 50%.

How are other markets trading?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.40%   ticked up fractionally to 1.77%.

In commodities markets, the cost of a barrel of West Texas Intermediate crude CL00, -2.42%   slipped 2.6% to $56.86. Gold for February delivery GCG20, -0.07%   slipped 0.1% to $1,556.80 as safe-haven investments became less attractive.

The U.S. dollar DXY, +0.06%   was nearly flat relative to a basket of its peers as measured by the DXY index.

In Europe, the Stoxx Europe SXXP, -0.08%   was up less than 0.1% but the FTSE 100 FTSE, -0.45%   fell 0.5%.

In Asia overnight, the China CSI 300 000300, +0.43%   rose 0.4%, while the Hang Seng HSI, +1.27%   jumped 1.3%.

Leave a Reply

Your email address will not be published. Required fields are marked *