BA Boeing Co

By Joe Wallace and Paul Vigna 

The S&P 500 rose as the rate of new coronavirus cases in China slowed, bolstering investors' hopes that authorities there and in the U.S. will take the necessary steps to contain the outbreak and shield the world economy.

The broad stock-market index added 0.4%, and the Nasdaq Composite rose 0.4%. The Dow Jones Industrial Average slipped 11 points, or less than 0.1%, weighed down by declines in Boeing. The company reported no new jetliner orders in January, adding to its financial strains in the wake of its 737 MAX crisis. Boeing -- the most heavily weighted stock in the index -- dropped 0.5%, or $1.74.

The moves came after major U.S. indexes rose to new highs Monday, with the S&P 500 clinching a ninth record close of 2020.

Investors also parsed comments by Federal Reserve Chairman Jerome Powell, who said the central bank is "closely monitoring" the potential for global economic disruptions from the emergence of the coronavirus in China.

While "some of the uncertainties around trade have diminished recently," the viral outbreak "could lead to disruptions in China that spill over to the rest of the global economy," Mr. Powell said Tuesday in testimony to be delivered before the House Financial Services Committee.

Edward Moya, senior market analyst at brokerage Oanda, said investors are confident the Fed will step in to support the economy if needed.

"Until the Fed starts to tighten" -- something nobody expects -- "it's green lights and go-time," he said.

Overseas, the Stoxx Europe 600 index rose 0.7%, hitting an all-time high, and the Hang Seng Index jumped 1.3% in Hong Kong, snapping two days of losses. Yields on U.S. and European government bonds gained, as did the price of commodities including oil and copper, which had tumbled in recent weeks as demand for raw materials weakened in China.

While concerns about the widespread transmission of the virus to other countries including the U.S. and U.K. remain, the number of confirmed infections inside China rose by 400 to 42,700 Tuesday, the smallest one-day increase in cases since Jan. 24.

"The rate of infection seems to be slowing," said Altaf Kassam, head of investment strategy for EMEA at State Street Global Advisors. He said he wasn't tracking the total number of infections, "but the rate, the speed at which the disease is spreading, and that seems to be topping out."

In addition, investors are "fully convinced that the Chinese government will step in to do, to quote Mario Draghi, whatever it takes" to support the domestic economy, Mr. Kassam said.

The potential economic fallout from the contagion and efforts to stop the virus from spreading remains a concern. The death toll has surpassed 1,000 and businesses have been slow to resume operations following the extended Lunar New Year Holiday, even after some local governments stopped calling for people to stay away from the workplace.

Still, "there are signs now that the authorities are getting on top of the situation," said Nick Peters, a portfolio manager with Fidelity International.

As uncertainty about the epidemic sparked volatility, Mr. Peters established short positions in stock-index futures to protect his investments against a decline in share prices. In recent days, he has unwound those hedges and is "back into a risk-on mode," betting on a rise in share prices in markets that he considers to be cheap, such as Japan and Europe.

Among individual stocks, shares of Sprint surged 71% after a federal judge approved the company's merger with T-Mobile. The decision clears the way for the No. 3 and No. 4 wireless carriers by subscribers to combine, overcoming an antitrust challenge. T-Mobile shares rose 10%.

Under Armour shares dropped 18% after the sportswear company reported a loss for the holiday quarter and said U.S. sales would fall in 2020.

Later Tuesday, companies including Western Union and Lyft are due to report quarterly results.

Write to Joe Wallace at Joe.Wallace@wsj.com and Paul Vigna at paul.vigna@wsj.com

(END) Dow Jones Newswires

February 11, 2020 12:02 ET (17:02 GMT)

Boeing (NYSE:BA)
Historical Stock Chart
From Mar 2024 to Apr 2024

Boeing (NYSE:BA)
Historical Stock Chart
From Apr 2023 to Apr 2024