US Stocks Close Broadly Higher 01/28 16:23
Stocks closed broadly higher on Wall Street Tuesday, reversing a big slice
of the market's losses from a sharp sell-off the day before.
(AP) -- Stocks closed broadly higher on Wall Street Tuesday, reversing a big
slice of the market's losses from a sharp sell-off the day before.
The rebound ended a five-day losing streak for the Dow Jones Industrial
Average fueled largely by fears that the spread of a new virus in China could
hamper global economic growth. The outbreak has killed more than 100 people,
putting a chill on travel and tourism in China.
Investors placed their concerns about the virus' potential economic impact
on the back burner and snapped up stocks beaten down earlier in the week,
particularly chipmakers and other technology companies. The sector notched the
biggest gain Tuesday and powered much of the rally.
"There are always a few bargain hunters out there who will step in and start
buying almost immediately," said Randy Frederick, vice president of trading &
derivatives at Charles Schwab. "But I'm quite surprised that it's been this
quickly and that it has rebounded as much as it has."
The S&P 500 index rose 32.61 points, or 1%, to 3,276.24. The Dow gained
187.05 points, or 0.7%, to 28,722.85. The Nasdaq climbed 130.37 points, or
1.4%, to 9,269.68. The Russell 2000 index of smaller company stocks picked up
14.18 points, or 0.9%, to 1,658.31.
Bond prices fell, sending yields higher following a significant drop a day
earlier. The yield on the 10-year Treasury climbed to 1.65% from 1.60% late
Despite the rebound, the major U.S. indexes are still down for the week. The
losses have hit smaller company stocks hardest, erasing the Russell 2000's
gains for the year.
U.S. stocks were running at all-time highs at the start of the month. An
index measuring volatility in the market was running at 12- month lows and the
benchmark S&P 500 had climbed around 13% since early October after Washington
and Beijing announced they would sign a preliminary trade deal.
That set the market up for a pullback, and investors' jitters over the virus
outbreak fit the bill.
"It may be symptomatic about how bullish overall people have been and how
much money still sits on the sidelines," Frederick said. "People are just
looking for any opportunity to get a bargain right now, but it could ultimately
end up being a little bit risky to do that."
More than 4,500 people have been confirmed ill with the virus and 106 have
died in the outbreak of a new coronavirus centered in the Chinese city of
Wuhan, an industrial hub along the Yangtze river. The virus has now spread to
more than a dozen countries.
Hong Kong has joined much of China in seriously restricting travel by
cutting all rail links to the mainland. China's containment efforts began with
the suspension of plane, train and bus links to Wuhan and has now expanded to
17 cities with more than 50 million people in the most far-reaching
disease-control measures ever imposed.
The United States and several other nations were taking steps to airlift
citizens out of a Chinese city at the center of the outbreak. Still, U.S.
health officials said Tuesday that, for now, the risks to Americans is very low.
Apple was one of the big gainers in the technology sector Tuesday. The
iPhone maker rose 2.8% and continued to climb in extended trading after it
released quarterly results following the closing bell that topped analysts'
Chipmakers also made solid gains. Intel added 2.5% and Nvidia rose 3.2%.
Many of those companies are affected by China's economy because they rely
heavily on that nation for sales and supply chains.
Banks and other financial companies also climbed, along with communications
stocks. Utilities, real estate companies and household goods makers notched the
smallest gains as investors shifted less money into safe-play sectors.
Shares in casino operators, hotel chains, cruise lines and other
travel-related companies recouped some of their losses over the past few days
as worries about the virus outbreak's impact on tourism hammered the stocks.
Wynn Resorts rose 0.9% and Las Vegas Sands gained 1.8%. Delta Air Lines added
1.1% and Carnival gained 2.7%.
Investors continued to assess company earnings reports. Pfizer slid 5% after
the biggest U.S. drugmaker reported disappointing fourth-quarter earnings.
Harley-Davidson dropped 3% after the storied motorcycle maker reported weak
fourth-quarter earnings and revenue. The company had a tough quarter for U.S.
sales, which led the overall worldwide drop.
Wall Street is in the midst of a heavy week for corporate earnings. Boeing,
McDonald's, Facebook and Microsoft will all report results on Wednesday. Other
big names reporting this week include Coca-Cola, Amazon, Caterpillar and Exxon
The Federal Reserve is also set to deliver its latest interest rate and
economic policy update Wednesday. The central bank lowered its key interest
rate three times last year in a bid to shield the economy from slowing global
growth and the fallout from the U.S.-China trade war.
Benchmark crude oil rose 34 cents settle at $53.48 a barrel. Brent crude
oil, the international standard, gained 19 cents to close at $59.51 a barrel.
Wholesale gasoline rose 2 cents to $1.50 per gallon. Heating oil climbed 2
cents to $1.72 per gallon. Natural gas rose 3 cents to $1.93 per 1,000 cubic
Gold fell $7.60 to $1,569.80 per ounce, silver fell 60 cents to $17.46 per
ounce and copper fell 2 cents to $2.58 per pound.
The dollar rose to 109.14 Japanese yen from 108.93 yen on Monday. The euro
was unchanged at $1.1017.
Markets in Hong Kong, Taiwan and mainland China were closed Tuesday for
Lunar New Year holidays. Indexes fell elsewhere, including a 3.1% tumble for
South Korea's benchmark. European markets closed broadly higher.