By Stephen Culp
(Reuters) – The S&P 500 reversed its losses on Thursday as investors weighed mixed news on the coronavirus and a spate of corporate earnings.
While a drop in Cisco Systems Inc
Hopes that the coronavirus epidemic could be on the wane were soured by a spike in fatalities, with an additional 242 bringing China’s coronavirus death toll to 1,367.
The news caused a broad sell-off in global markets in a crisis that has resulted in quarantines, supply line disruptions and factory closings.
Still, there were glimmers of optimism as the director of the World Health Organization (WHO) told a news briefing that “we are not seeing dramatic increases in cases outside China.”
“(Investors are) looking at cross-currents and trying to figure out which is more important,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “The fact that the Fed is willing to stay the course offsets the coronavirus issue.”
Indeed, in his economic report to Congress earlier this week, U.S. Federal Reserve Chair Jerome Powell said the central bank was assessing the risk of the coronavirus and other potential threats, indicating any change to its accommodative policy was unlikely this year.
The Dow Jones Industrial Average <.DJI> fell 54.33 points, or 0.18%, to 29,497.09, the S&P 500 <.SPX> gained 2.89 points, or 0.09%, to 3,382.34 and the Nasdaq Composite <.IXIC> added 14.34 points, or 0.15%, to 9,740.30.
Of the 11 major sectors in the S&P 500, seven were trading in the black, led by defensive utilities <.SPLRCU> and consumer staples <.SPLRCS>.
Energy <.SPNY> stocks suffered the largest percentage loss.
The fourth-quarter reporting season is nearing its final approach, with 378 companies in the S&P 500 having posted results. Of those, 71.2% have surprised consensus estimates to the upside, according to Refinitiv data.
Analysts now see aggregate fourth-quarter earnings increasing at a 2.5% annual rate, a stark reversal from the 0.3% decline seen at the beginning of the year.
Cisco Systems dropped 5.0% after providing lackluster forward revenue and profit guidance on its quarterly earnings call.
Tesla Inc Alibaba Group American International Group Inc Shares of Kraft Heinz Co NetApp Inc Advancing issues outnumbered declining ones on the NYSE by a 1.03-to-1 ratio; on Nasdaq, a 1.06-to-1 ratio favored advancers.
The S&P 500 posted 59 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 132 new highs and 51 new lows.
(Reporting by Stephen Culp; Editing by Dan Grebler)