U.S. Stocks Gain After China Moves to Curb Virus: Markets Wrap


U.S. Stocks Gain After China Moves to Curb Virus: Markets Wrap

(Bloomberg) — U.S. equities rose on speculation the respiratory illness that emerged from China won’t be as bad as initially feared and as better-than-forecast corporate earnings lifted optimism. Oil fell on concern the market is oversupplied.

Technology shares led the advance on the S&P 500 after China took steps to contain the spread of a deadly virus that had rattled international markets. IBM Corp. rallied after revenue beat estimates. The Stoxx Europe 600 Index fluctuated, with Italian banks slumping as a fresh bout of political turmoil unnerved investors. Tesla Inc.’s market value soared past $100 billion, topping Volkswagen AG for the first time.

Chinese shares eked out a gain and the yuan steadied after Beijing said it will start a nationwide screening effort to tackle the outbreak of the Wuhan virus.

With stocks trading near record highs, investors are on alert for any developments that could derail the momentum and had taken a cautious stance amid concern the virus could turn into a global pandemic that dents economic growth. A sense that China is coming to grips with containing the illness gave traders the chance to hunt for bargains following yesterday’s declines.

“China clearly is being transparent and talking about the measures they’re going to take,” said Arthur Hogan, chief market strategist at National Securities Corp. “That reassures markets that perhaps this won’t turn into an epidemic. The tone around that improved overnight, and on top of that we had a couple of companies that surprised to the upside.”

Elsewhere, West Texas fell below $58 a barrel as ample global supplies offset the loss of exports from Libya.

Here are some events to watch out for this week:

Companies including Texas Instruments Inc., Intel Corp. and Procter & Gamble Co. will post results.Policy decisions are due from central banks in Indonesia and the euro region.The World Economic Forum, the annual gathering of global leaders in politics, business and culture, continues in Davos, Switzerland.

These are the main moves in markets:

Stocks

The S&P 500 Index increased 0.5% as of 10:37 a.m. New York time.The Stoxx Europe 600 Index rose 0.1%.Italy’s FTSE MIB Index declined 0.4%.The MSCI Asia Pacific Index jumped 0.7%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The British pound jumped 0.7% to $1.3137.The euro was little changed at $1.1077.The Japanese yen was little changed at 109.9 per dollar.

Bonds

The yield on 10-year Treasuries fell one basis point to 1.76%.Germany’s 10-year yield dipped two basis points to -0.27%.Britain’s 10-year yield was little changed at 0.63%.

Commodities

West Texas Intermediate crude dropped 2.5% to $56.85 a barrel.Gold slipped 0.2% to $1,555.26 an ounce.

–With assistance from Christopher Anstey, Andrew Janes, Adam Haigh, Todd White and Robert Brand.

To contact the reporter on this story: Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Sam Potter at spotter33@bloomberg.net, ;Jeremy Herron at jherron8@bloomberg.net, Brendan Walsh

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