Wall St reaches record highs on waning coronavirus fears; tech stocks lead rally2 min read . Updated: 13 Feb 2020, 01:30 AM IST
- China reported its lowest number of new coronavirus cases in two weeks, the day after a senior Chinese medical adviser said the epidemic could be over by April
- Of the 11 major sectors in the S&P 500, all but consumer staples were in the black
New York: All three major US stock averages reached record highs on Wednesday as news that the dreaded coronavirus could be running out of steam kept buyers in the ring.
Technology shares led the broad-based rally, which set the S&P 500 and the Nasdaq up for their third consecutive all-time closing highs. The Dow last had set a closing record on Feb 6.
China reported its lowest number of new coronavirus cases in two weeks, the day after a senior Chinese medical adviser said the epidemic could be over by April.
Still, the outbreak has spooked investors amid quarantines, supply-chain disruptions and factory shutdowns and the World Health Organization (WHO) warned that beyond China's borders, the crisis could be just beginning.
Market participants closely watched as U.S. Federal Reserve chair Jerome Powell wrapped up his semiannual economic report before congress, during which he reiterated that the central bank is closely monitoring the coronavirus and other threats.
"(The Fed has) communicated that they're going to be on hold for some time and the dovish stand will be in place for the rest of the year," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. "And the uncertainty surrounding the coronavirus is a confirmation of that."
"The Fed has indicated that they're going to take a wait and see approach that gives the market a bit of a runway," Keator added.
Powell repeated his confidence in the sustainability of the current U.S. economic expansion, now in its 11th year.
The Dow Jones Industrial Average rose 228 points, or 0.78% to 29,503.82, the S&P 500 gained 18.08 points, or 0.54%, to 3,375.83 and the Nasdaq Composite added 71.65 points, or 0.74%, to 9,710.59.
Of the 11 major sectors in the S&P 500, all but consumer staples were in the black, with energy, consumer discretionary and communications services enjoying the largest percentage gains.
Fourth-quarter reporting season is over the hump, with 351 companies in the S&P 500 having posted results. Of those, 70.9% have surprised analyst expectations to the upside, according to Refinitiv data.
Aggregate fourth-quarter earnings are now seen growing at an annual rate of 2.4%, a turnaround from the 0.3% year-on-year decrease forecast on Jan 1.
Lyft Inc slid 9.7% after the ride-hailing company forecast slower revenue growth in 2020.
Micron Technology Inc gained 3% after UBS upgraded the chipmaker's shares to "buy."
The broader Philadelphia SE Semiconductor index advanced 1.3%.
Advancing issues outnumbered declining ones on the NYSE by a 1.84-to-1 ratio; on Nasdaq, a 1.78-to-1 ratio favoured advancers.
The S&P 500 posted 63 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 123 new highs and 41 new lows.
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