U.S. Stocks Move Mostly Higher Amid Easing Coronavirus Concerns

Following the weakness seen in the previous session, stocks moved mostly higher during trading on Wednesday. With the upward move on the day, the Nasdaq and the S&P 500 reached new record closing highs.

The major averages pulled back off their best levels going into the close but remained firmly positive. The Dow rose 115.84 points or 0.4 percent to 29,348.03, the Nasdaq advanced 84.44 points or 0.9 percent to 9,817.18 and the S&P 500 climbed 15.86 points or 0.5 percent to 3,386.15.

Easing concerns about the coronavirus outbreak contributed to the strength on Wall Street after Chinese officials reported the lowest number of newly confirmed cases since late January.

China’s National Health Commission reported 1,749 new cases of the coronavirus, bringing the nationwide total to 74,185. More than 2,000 people have died as a result of the outbreak.

A rebound by shares of Apple (AAPL) also generated some positive sentiment, with the tech giant jumping by 1.5 percent after slumping by 1.8 percent on Tuesday.

Apple warned of weaker than previously forecast second quarter revenue due to the coronavirus outbreak, but traders seem optimistic the impact will only be temporary.

On the U.S. economic front, the Labor Department released a report showing producer prices increased by much more than anticipated in the month of January.

The Labor Department said it producer price index for final demand climbed by 0.5 percent in January after rising by 0.2 percent in December. Economists had expected producer prices to inch up by 0.1 percent.

Excluding a pullback in energy prices and a modest increase in food prices, core producer prices still rose by 0.5 percent in January compared to economist estimates for a 0.2 percent uptick.

A separate report released by the Commerce Department showed a pullback in new residential construction in the month of January.

The Commerce Department said housing starts slumped by 3.6 percent to an annual rate of 1.567 million in January after soaring by 17.7 percent to a revised rate of 1.626 million in December.

Economists had expected housing starts to tumble by 11.4 percent to a rate of 1.425 million from the 1.608 million originally reported for the previous month.

Meanwhile, the report said building permits spiked by 9.2 percent to an annual rate of 1.551 million in January after sliding by 3.7 percent to a revised rate of 1.420 million in December.

Building permits, an indicator of future housing demand, had been expected to rise by 2.4 percent to a rate of 1.450 million from the 1.416 million originally reported for the previous month.

Toward the end of the trading day, the Federal Reserve released the minutes of its latest monetary policy meeting, which reiterated Fed officials believe leaving interest rates at their current levels is likely to remain appropriate for some time.

The minutes of the January meeting made several references to the coronavirus outbreak but are likely to reinforce expectations that the Fed will remain on hold at upcoming meetings.

Sector News

Natural gas stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Natural Gas Index up by 2.9 percent.

The rally by natural gas stocks came despite a decrease by the price of the commodity, as crude for March delivery fell $0.026 to $1.955 per million BTUs.

Substantial strength was also visible among semiconductor stocks, as reflected by the 2.6 percent jump by the Philadelphia Semiconductor Index.

Gold, oil and brokerage stocks also saw considerable strength on the day, while interest rate-sensitive real estate and utilities stocks showed notable moves to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index advanced by 0.9 percent, while Hong Kong’s Hang Seng Index rose by 0.5 percent.

The major European markets also moved to the upside on the day. While the U.K.’s FTSE 100 Index surged up by 1 percent, the French CAC 40 Index and the German DAX Index jumped by 0.9 percent and 0.8 percent, respectively.

In the bond market, treasuries climbed off their worst levels but still closed modestly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.4 basis points to 1.570 percent.

Looking Ahead

News on the coronavirus front is likely to remain in focus on Thursday, although traders are also likely to keep an eye on reports on weekly jobless claims, leading economic indicators, and Philadelphia-area manufacturing activity.

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