S&P 500, Dow clinch fresh highs as new coronavirus cases drop

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© Reuters. Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York© Reuters. Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York

By Medha Singh

(Reuters) – The S&P 500 and Dow Jones Industrials hit all-time highs on Wednesday as investors drew comfort from a drop in the number of new cases of coronavirus infections in China.

China on Wednesday reported its lowest number of new coronavirus cases since January, lending weight to a prediction by its top medical adviser for the outbreak to end by April.

However, it was still unclear to what extent economic growth would take a hit from the virus that has killed more than 1,100 people, shuttered businesses in China and briefly disputed global stock market rally in the past weeks.

“The estimates for the hit to the Chinese economy is very wide ranging, but mostly there’s optimism the impact to the U.S. economy is going to be minimal,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE:) in Austin, Texas.

“Ultimately if the case count growth rate continues to slow, this optimism continues.”

The benchmark S&P 500 has climbed nearly 5% from late January lows, as largely positive fourth-quarter earnings, encouraging U.S. economic data and stimulus from China spurred demand for risk despite concerns about the virus outbreak.

The S&P 500 () and the Nasdaq () hit record closing highs on Tuesday.

At 9:51 a.m. ET, the Dow Jones Industrial Average () rose 0.67% to 29,472.41 and the S&P 500 () gained 0.46% to 3,373.24.

The Nasdaq Composite () was up 0.42% at 9,679.72.

The energy sector () gained 1.6%, the most among major S&P sectors, as oil prices surged. The defensive real estate <.SPLRCR>, utilities () and consumer staples () lagged the most. [O/R]

A mostly upbeat fourth-quarter earnings season is beginning to wind down, with 337 S&P 500 companies having reported. Of those, 70.9% have surpassed profit expectations, according to IBES data from Refinitiv.

Molson Coors Beverage (N:) jumped 4.8% after the beer maker beat quarterly profit and sales estimates.

Lyft Inc (O:) slid 8.5% as the ride-hailing company forecast slower revenue growth for the year.

Micron Technology Inc (O:) gained 5.7% after UBS upgraded the chipmaker’s shares to “buy”.

Markets will closely follow remarks from U.S. Federal Reserve Chair Jerome Powell as he resumes the second day of his semiannual economic report to the Congress.

Advancing issues outnumbered decliners by a 2.40-to-1 ratio on the NYSE and by a 2.01-to-1 ratio on the Nasdaq.

The S&P index recorded 37 new 52-week highs and one new low, while the Nasdaq recorded 76 new highs and 17 new lows.

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