By Stephen Culp
NEW YORK (Reuters) – Wall Street advanced on Tuesday with the S&P 500 and the Nasdaq on track to score their second consecutive record highs after officials said the deadly coronavirus could be contained by April.
The news brought buyers back to the equities market, pushing all three major U.S. stock averages into the black.
Amazon.com provided the biggest boost to both the S&P 500 and the Nasdaq, while McDonald’s Corp led the blue-chip Dow’s advance.
The World Health Organization, or WHO, characterized the Chinese coronavirus as a “very grave” international threat. But China’s foremost medical adviser on the outbreak said the crisis could be over by April, soothing jitters over the fast-moving epidemic, which has spooked investors.
“It feels as though the market is nervous but it keeps moving higher,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.
“The concern of not being in this market is outweighing the risk of being in the market,” Pavlik added. “People are nervous but they’re more nervous about not making the returns and sitting on the sidelines.”
Market participants watched closely as U.S. Federal Reserve Chair Jerome Powell began his semiannual economic update before congress.
Powell’s remarks reiterated his view that the economy, in its 11th year of expansion, remains “resilient,” but that the central bank was closely monitoring potential risks, including the coronavirus.
The Dow Jones Industrial Average rose 16.92 points, or 0.06%, to 29,293.74, the S&P 500 gained 10.28 points, or 0.31%, to 3,362.37 and the Nasdaq Composite added 29.16 points, or 0.3%, to 9,657.55.
Of the 11 major sectors in the S&P 500, all but communications services, consumer staples and technology were trading in positive territory, with real estate showing the largest percentage gain.
Fourth-quarter reporting season is heading into the final stretch with 337 of the companies in the S&P 500 having reported. Of those, 70.9% have beaten consensus estimates, according to Refinitiv data.
Analysts now expect aggregate year-on-year fourth-quarter earnings of 2.4%, a stark reversal from the 0.3% decline seen on Jan 1.
T-Mobile shares jumped 11.1% after a federal judge approved its purchase of Sprint, clearing the path for a deal originally valued at $26 billion.
Sprint surged 72.9%, while larger rival Verizon Communications Inc slipped 2.2%.
Celular tower operators, including SBA Communications Corp, American Tower Corp and Crown Castle International Corp, rose between 4% and 7% on expectations that the deal could increase tower demand.
Under Armour Inc tumbled 16.4% after the sportswear company forecast a surprise drop in 2020 profit.
Advancing issues outnumbered declining ones on the NYSE by a 2.53-to-1 ratio; on Nasdaq, a 1.92-to-1 ratio favored advancers.
The S&P 500 posted 78 new 52-week highs and two new lows; the Nasdaq Composite recorded 146 new highs and 56 new lows.
(This story correts to make clear that Chinese senior medical adviser, not WHO, said outbreak may be over by April).
(Reporting by Stephen Culp; editing by Jonathan Oatis)