NEW YORK, Jan 31 ― US stocks rebounded late to close higher yesterday after the World Health Organization (WHO) declared the China coronavirus a global emergency, while earnings painted a mixed picture.
After the Centers for Disease Control and Prevention reported the first US incident of person-to-person spread of the virus, the WHO said recent weeks have seen an unprecedented outbreak, met by an unprecedented response. It said it was not recommending limiting trade or travel to China.
“The market is starting to look at this and say at some point in time this will crest and the news will start getting better,” said Art Hogan, chief market strategist at National Securities in New York.
“Precautions are being taken and that means at some point there will be light at the end of the tunnel, that is when the market reacts constructively.”
Facebook shares slumped 6.14 per cent after the social media company warned of slowing growth as its business matured and it reported a surge in quarterly expenses.
The decline weighed on the S&P communication services index , which lost 0.79 per cent. Defensive sectors such as utilities and consumer staples, considered safer in times of economic uncertainties, advanced.
The main US stock indexes are on course for their second straight week of declines as the virus has disrupted global travel and forced several companies to suspend operations in China.
The Dow Jones Industrial Average rose 124.99 points, or 0.43 per cent, to 28,859.44, the S&P 500 gained 10.26 points, or 0.31 per cent, to 3,283.66 and the Nasdaq Composite added 23.77 points, or 0.26 per cent, to 9,298.93.
Earnings expectations have been slowly improving for S&P 500 companies, with Refinitiv data showing a 0.7 per cent rise in fourth-quarter profit, compared with a 0.6 per cent decline estimated at the start of the season.
Microsoft Corp gained 2.82 per cent after it beat expectations for quarterly earnings, driven by Azure cloud computing revenue growth.
Tesla Inc jumped 10.30 per cent after the maker of electric cars posted a second straight quarterly profit as vehicle deliveries hit a record.
Altria Inc slid 4.21 per cent after the tobacco company said it took another US$4 billion (RM16.3 billion) charge on its investment in Juul Labs Inc. Package delivery firm United Parcel Service Inc dropped 6.70 per cent after it forecast full-year earnings below estimates.
After the close, Amazon gained 10 per cent after fourth-quarter revenue topped expectations.
Declining issues outnumbered advancing ones on the NYSE by a 1.01-to-1 ratio; on Nasdaq, a 1.32-to-1 ratio favoured decliners.
The S&P 500 posted 48 new 52-week highs and 14 new lows; the Nasdaq Composite recorded 57 new highs and 94 new lows.
About 7.72 billion shares changed hands in US exchanges, compared with the 7.54 billion daily average over the last 20 sessions. ― Reuters
