US stocks 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.

FILE – In this Jan. 15, 2020, file photo specialist Scott Vasilisin, right works with trader Michael Milano on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EST on Wednesday, Jan. 22. (AP Photo/Richard Drew, File)

The S&P 500 and Nasdaq composite eked out tiny gains, while the Dow Jones Industrial Average finished slightly lower. Gains in technology, financial and health care stocks 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 U.S. and three other countries.

China and other nations ramped up screenings for fever on aircraft and at airports.

The measures appeared to provide some reassurance to Wall Street a 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 had been up by as much as 0.5% earlier in the day.
The Dow Jones Industrial Average reversed an early gain and fell 9.77 points, or less than 0.1%, to 29,186.27.

The Nasdaq composite gained 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% late Tuesday.

The coronavirus has been confirmed in five countries, including 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 the illness, which 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 after the company reported surprisingly strong results for the fourth quarter and issued a solid profit forecast for 2020. The stock climbed 3.4%.

Capital One Financial gained 4.5% after the credit card issuer and bank reported surprisingly good fourth-quarter earnings.

Netflix dropped 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’s latest quarterly results topped analysts’ forecasts.

While only about 10% of S&P 500 companies have reported their results for the last three months of 2019, early indications are encouraging. Of those companies that have reported results, 78.4% topped analysts’ forecasts for profits, according to S&P Global Market Intelligence.

Those forecasts were low, to be sure, with analysts saying S&P 500 profits fell last quarter for the fourth consecutive time, according to FactSet.

Traders also bid up shares in homebuilders Wednesday following new data showing that U.S. home sales climbed 3.6% last month. The National Association of Realtors said that 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 led the homebuilder rally, gaining 2.5%.

Investors continued to drive Tesla shares higher. The electric vehicle and solar panel maker climbed 4.1%, attaining a $100 billion market capitalization 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 per ounce, silver rose 2 cents to $17.77 per ounce and copper fell 3 cents to $2.77 per pound.

The dollar rose to 109.89 Japanese yen from 109.81 yen on Tuesday. The euro weakened to $1.1092 from $1.1095.

European markets closed broadly lower. Asian markets finished higher.

GSG