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U.S. stock benchmarks traded modestly higher at the start of Wednesday’s session as investors took some optimism from measures China says it has taken to help coronavirus-stricken businesses, helping to push the Nasdaq Composite to a new all-time high.
How are benchmarks performing?
The Dow Jones Industrial Average DJIA, +0.19% advanced 105 points, or 0.3%, to 29,337. The S&P 500 SPX, +0.41% rose 13 points, or 0.4%, to 3,383. If the S&P 500 finishes above 3,380.16, it will set a new closing high. The Nasdaq Composite COMP, +0.73% added 61 points, or 0.5%, to 9,794.
On Tuesday, the Dow shed 165.89 points, or 0.6%, to settle at 29,232.10, while the S&P 500 lost 9.87 points or 0.3% to close at 3,370.29. However, the Nasdaq Composite Index gained 1.57 points, or less than 0.1%, to finish at a record 9,732.74, after flipping positive in afternoon trade.
What’s driving the market?
U.S. stocks have remained in an uptrend for February, helped by corporate earnings reports, despite the potential for slowing global economic growth due to disruptions to trade and travel caused by COVID-1, the infectious disease that originated in Wuhan, China late last year.
Chinese officials have said the rate of new cases has begun to ebb, but the World Health Organization has recommended caution.
On Wednesday, investors also appeared heartened by comments from China’s Ministry of Industry and Information Technology, which said Beijing would help companies to identify weak links in supply chains, The Wall Street Journal reported.
The assistance is one of several steps that Beijing and local Chinese authorities have taken to limit the economic fallout of the coronavirus, which has sickened 75,200 people and claimed more than 2,000 lives. Help is focused on small and medium-size businesses in Hubei province and include temporary cuts to taxes, low-interest-rate loans for farmers and rent reductions for businesses, according to the South China Morning Post.
Looking ahead, investors will watch for cues from the Federal Reserve, which will release minutes from its policy meeting last month, where the central bank held benchmark rates at a 1.50%-1.75% range and said it would monitor the coronavirus impact on the global economy.
“COVID-19 remains the market driver and is set to frame policy makers’ reactions around the world over the near-term,” wrote Han Tan, market analyst at FXTM, in a research report.
“The global economic outlook remains mired in uncertainty at this point in time, with coronavirus-related warnings emanating out of Apple and corporate America,” he said, referring to Apple Inc.’s warning on Monday, which weighed on stocks on Tuesday.
In U.S. economic reports, the Commerce Department said housing starts fell 3.6% in January to an annual pace of 1.57 million, but permits rose to a 13-year high of 1.55 million. U.S. producer prices jumped 0.5% last month, its biggest increase in 15 months.
“Net, net, the economy looks good with residential home building activity beating expectations and a little more producer price inflation even if the data overstate how well the country is doing in terms of generating the growth and inflation the Federal Reserve wants to see,” said Chris Rupkey, chief economist at MUFG.
Which Fed speakers are on deck?
- Minneapolis Fed President Neel Kashkari is due up at 11:10 a.m.
- Dallas Fed President Robert Kaplan speaks at 1 p.m.
- Richmond Fed President Thomas Barkin is scheduled to make remarks at 4:30 p.m.
Which stocks are in focus?
- Garmin Ltd. GRMN, +8.43% shares rose after the company reported results that were better than expected.
- Bausch Health Cos. Inc. shares BHC, -8.70% fell after reporting quarterly results.
- Analog Devices shares ADI, +5.35% climb after Wall Street earnings beat.
- Philip Morris stock PM, -0.14% slump after earnings falls short of expectations.
- Tesla Inc.’s stock TSLA, +6.55% shot above $850 after a Benstein analyst said it saw no “imminent” negative catalyst.
- Uber Technologies Inc. UBER, +0.68% shut down its Los Angeles office, but its shares traded higher on Wednesday.
How are other assets performing?
The price of a barrel of West Texas Intermediate crude for March delivery CLH20, +1.33% rose 1.4% to $52.79 a barrel on the New York Mercantile Exchange.
Gold for April delivery GCJ20, +0.17% added 0.2% to reach 1,606.90 an ounce, extending its climb above the psychologically important level at $1,600.
The U.S. dollar DXY, +0.20% was little-changed against a basket of rival currencies at 99.60.
The benchmark U.S. 10-year Treasury note TMUBMUSD10Y, +0.54% was up slightly at 1.57%. Bond yields fall when prices rise.
In Europe, the Stoxx Europe 600 SXXP, +0.75% advanced 0.6%, while the FTSE 100 UKX, +0.99% climbed 0.8%.
In Asia overnight, the China CSI 300 000300, -0.15% ended 0.2% lower to close at 4.051.31, the Shanghai Composite SHCOMP, -0.32% edged down 0.3% at 2,975.40, and the Hang Seng Index HSI, +0.46% gained 0.5% to 27,655.81. The Nikkei 225 NIK, +0.89% rose 0.9% to 23,400.70.
