Stocks end flat as health authorities focus on China virus
Major U.S. stock indexes ended little changed Wednesday after an early rebound rally faded in the final minutes of trading.
The Standard & Poor’s 500 index and Nasdaq composite eked out tiny gains, while the Dow Jones industrial average finished slightly lower. Gains by technology, financial and healthcare companies mainly outweighed losses in industrial, energy, real estate and other sectors.
Investors had their eye on an international effort by health authorities to monitor and contain a deadly virus outbreak in China that has spread to the United States and three other countries.
China and other nations ramped up screenings for fever on planes and at airports. The measures appeared to provide some reassurance to Wall Street the day after financial markets sold off over fears that the outbreak in the world’s second-largest economy could spread, hurting tourism and ultimately economic growth and corporate profits.
“The coronavirus fear that permeated stocks yesterday has subsided some, and you see some of those stocks that were affected negatively yesterday rebounding,” said Keith Buchanan, portfolio manager at Globalt Investments.
The S&P 500 index rose 0.96 points, or less than 0.1%, to 3,321.75. The index was up as much as 0.5% earlier in the day.
The Dow ended down 9.77 points, or less than 0.1%, at 29,186.27. The Nasdaq edged up 12.96 points, or 0.1%, to 9,383.77. The Russell 2000 index of smaller-company stocks slipped 1.44 points, or 0.1%, to 1,684.46.
Bond prices fell. The 10-year Treasury yield rose to 1.77% from 1.76%.
The coronavirus has been confirmed in five countries: China, the U.S., Thailand, Japan and South Korea. As of Wednesday, more than 500 people were confirmed infected with the virus and 17 had died from it. The virus can can cause pneumonia and other severe respiratory symptoms.
A World Health Organization committee was scheduled to meet for a second day Thursday as it decides whether to declare the outbreak a global health emergency.
IBM was among the big gainers in the technology sector Wednesday, climbing 3.4% after it reported surprisingly strong fourth-quarter results and issued a solid profit forecast for 2020.
Capital One Financial climbed 4.5% after the credit card issuer and bank reported surprisingly good fourth-quarter earnings.
Netflix slid 3.6% after the entertainment company gave investors a weak forecast for new subscribers during the first quarter. The company is facing tougher competition from Disney, Apple and others. It warned investors that it is seeing more U.S. customers dropping the service.
Navient jumped 9.5% after the student loan company issued quarterly results that beat analysts’ forecasts.
Although only about 10% of S&P 500 companies have reported their results for the last three months of 2019, early indications are encouraging. Of the companies that have reported results, 78.4% topped analysts’ forecasts for profits, according to S&P Global Market Intelligence.
Those forecasts were low, though: Analysts think S&P 500 profits fell last quarter for the fourth consecutive time, according to FactSet.
Homebuilder stocks climbed Wednesday after the release of new data showing that U.S. home sales climbed 3.6% last month. The National Assn. of Realtors said sales of previously occupied homes rose in December to a seasonally adjusted annual rate of 5.54 million. For all of 2019, 5.34 million homes were sold — matching the 2018 level. High mortgage rates hurt sales in the first half of the last year, while lower rates boosted purchases in the second half. Hovnanian Enterprises shares led the homebuilder rally, gaining 2.5%.
Tesla shares climbed 4.1%, pushing the electric vehicle and solar panel maker’s market capitalization above $100 billion for the first time. That market cap could turn into a supercharged payday for CEO Elon Musk, enabling him to receive a stock option package that’s worth close to $400 million.
Benchmark crude oil fell $1.64 to settle at $56.74 a barrel. Brent crude oil, the international standard, slid $1.38 to close at $63.21 a barrel.
Wholesale gasoline fell 6 cents to $1.58 per gallon. Heating oil declined 3 cents to $1.80 per gallon. Natural gas rose 1 cent to $1.91 per 1,000 cubic feet.
Gold fell $1.10 to $1,555.30 an ounce. Silver rose 2 cents to $17.77 an ounce. Copper fell 3 cents to $2.77 a pound.
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