S&P 500, Nasdaq hit new highs at open on coronavirus optimism

© Reuters. Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York© Reuters. Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York

By Medha Singh

(Reuters) – The and the Nasdaq indexes scaled new highs on Tuesday as investors took heart from remarks by a top Chinese health adviser that the coronavirus outbreak may be peaking.

After more than 1,000 deaths and weeks of uncertainty that roiled global financial markets, China’s foremost medical adviser on the epidemic said infections may be over by April.

“Markets are pricing in that we will see a peak in cases a lot sooner… so factories will be able to reopen and supply chain will begin to repair itself,” said Ephie Coumanakos, managing partner of Delaware-based Concord Financial Group.

However, the hit to the world’s second-largest economy was still unclear as factories struggled to resume production after an extended holiday.

The main U.S. stock indexes have reclaimed record highs as a batch of encouraging domestic economic data, largely upbeat corporate earnings and recent stimulus measures from China helped investors look past fears about the coronavirus.

Federal Reserve Chair Jerome Powell told Congress that the U.S. economy is in a good place, even as he cited the potential threat from the coronavirus in China.

The communication services index was among the only two major S&P sectors in the red. Cyclical sectors such as technology and consumer discretionary provided the biggest boosts to the benchmark index.

Pressuring the Dow Industrials’ advance was a 0.4% drop in Boeing (NYSE:) Co shares as the company reported no new orders for airplanes last month.

At 11:45 a.m. ET, the rose 0.07% to 29,296.65 and the S&P 500 gained 0.38% to 3,364.85. The was up 0.48% at 9,674.32.

T-Mobile shares jumped 10.5% to the top of the benchmark S&P 500, after a federal judge approved its purchase of Sprint, clearing the path for a deal which was originally valued at $26 billion.

Sprint surged 71.6%, while larger rival Verizon Communications Inc (NYSE:) slipped 2.5%.

Cell tower operators, including SBA Communications Corp (NASDAQ:), American Tower Corp (NYSE:) and Crown Castle International (NYSE:) Corp, jumped between 4% and 7.4% on expectation that the merger will result in additional cell-tower sites.

The fourth-quarter earnings season has been largely upbeat, with about 71% of the 324 S&P 500 companies that have reported beating profit estimates.

Hasbro Inc (NASDAQ:) rose 0.2% on better-than-expected quarterly profit, but Under Armour Inc (NYSE:) tumbled 16.5% after it forecast a surprise drop in 2020 profit.

Advancing issues outnumbered decliners by a 2.69-to-1 ratio on the NYSE and by a 1.93-to-1 ratio on the Nasdaq.

The S&P index recorded 77 new 52-week highs and two new lows, while the Nasdaq recorded 136 new highs and 48 new lows.

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