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Global shares mostly rise but virus fears continue Tech companies lead US stocks higher as virus fears subside
(about 2 hours later)
TOKYO — Globalshares mostly rose Wednesday though investors continued to monitor the impact of the outbreak of a new virus that began in China. NEW YORK — Technology companies led stocks higher in early trading Wednesday as investors set aside some of their concerns about the virus outbreak that originated in China.
France’s CAC 40 rose 0.6% to 6,093, while Germany’s DAX gained 0.5% to 13,745. Britain’s FTSE 100 gained 0.7% to 7,433. U.S. shares were set to drift higher with Dow and S&P 500 futures both up 0.3%. New cases of the virus fell for a second straight day. China’s top diplomat told counterparts in Southeast Asia that the situation “is under effective control” in the province where the outbreak is centered.
Japan’s benchmarkNikkei 225 rose0.9% to finish at 23,400.70.Australia’s S&P/ASX 200 added 0.4% to 7,144.60. South Korea’s Kospiedged up 0.1% to 2,210.34.Hong Kong’s Hang Seng added0.5% to 27,655.81,while the Shanghai Composite gave up earlier gains, edging 0.3% lower to 2,975.40. The early gains mark a reversal from Tuesday when tech stocks led the market lower after Apple warned that its revenue would take a hit because of the outbreak. Apple rose 1% and chipmaker Nvidia jumped 4.2%.
Adding to optimism, new virus cases in China have been falling, with 1,749 new infections and 136 new deaths announced on Wednesday. But data are showing disruptions continue to manufacturing, retailing and tourism. Bond prices fell, pushing yields higher. The yield on the 10-year Treasury rose to 1.57% from 1.55% late Tuesday. JP Morgan Chase, Bank of America and other banks climbed.
“Collapse in demand due to COVID-19 remains the key worry for the markets across the globe as the disease continues its spread,” said Prakash Sakpal, economist for Asia at ING. Navigation device maker Garmin and chipmaker Analog Devices jumped after reporting strong earnings. Safe-play assets like real estate companies and utilities lagged behind.
Japan reported its third straight month trade deficits in January and like the rest of Asia is enduring a downturn in tourism. Some controls have been set on travel to and from China and other places suffering from outbreaks of the virus. KEEPING SCORE: The S&P 500 index rose 0.4% as of 10:30 a.m. Eastern time. The Dow Jones Industrial Average rose 64 points, or 0.2%, to 29,298. The Nasdaq rose 0.7%. The Russell 2000 index of smaller company stocks rose 0.3%. Markets in Europe and Asia climbed.
Trade is likely to be a “major drag” on Japan’s economic growth this quarter, Tom Learmouth of Capital Economics said in a commentary. He is forecasting a 0.6% decrease in GDP in the January-March quarter linked to disruptions from the virus. FRESHENING THE PILLOWS: Bed Bath & Beyond rose 4.1% after the home goods retailer rolled out initiatives to turn the struggling chain around. The company will spend $1 billion this year reinvesting in stores, upgrading technology, and on debt reduction and share buybacks. The moves come a month after the company withdrew its annual financial forecast because of weak results.
The gains in Asian trading followed a modest loss on U.S. stock indexes, which gave up some of their solid gains from the past two weeks. SOLID CONSTRUCTION: Several homebuilders gained ground following a surprisingly good government report on new home construction. The report also showed that applications for building permits jumped 9.2% in January. Beazer Homes rose 1.8% and Hovnanian Enterprises rose 1.4%.
ENERGY: Benchmark crude oil rose 68cents to $52.73a barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil, the international standard, rose 74 cents to $58.49a barrel. VIRUS UPDATE: The virus has now infected more than 75,000 people globally, though the overwhelming majority of them are in China. Scientific instrument maker Agilent, which gets about 19% of its revenue from there, is the latest company to warn that the virus’ economic impact will hurt profits.
CURRENCIES: The dollar rose to110.48Japanese yen from 109.87 yen on Tuesday. The euro inched up to$1.0798from $1.0792.
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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.