Apple sparks Wall Street bounce ahead of results
NEW YORK (Reuters) – U.S. stocks rebounded on Tuesday, as the S&P 500 bounced back from its worst day in nearly four months, led by a climb in Apple and other names hit by exposure concerns to the coronavirus outbreak in China that sparked a recent sell-off.
FILE PHOTO: A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., January 24, 2020. REUTERS/Lucas Jackson/File Photo
Markets across the world stabilized as the head of the World Health Organization (WHO) said he was confident in China’s ability to stem the virus outbreak, which has killed 106 people in the country, prompted businesses to close operations and curbed travel.
Still, the U.S. health and human services secretary said new steps were being considered to counter the virus, including travel restrictions to China.
“Certainly the virus has not gone away, in fact it is only getting worse,” said Ken Polcari, senior market strategist at SlateStone Wealth LLC in Jupiter, Florida.
“But all the excitement now is that nobody thinks Apple is going to miss at all, on any line.”
Sectors that were hit hardest on Monday saw their fortunes reverse, with technology .SPLRCT and financials .SPSY among the best performers in the session.
Helping dampen concerns about a hit to the economy from the virus was data that showed U.S. consumer confidence surged to a five-month high in January.
(Graphic: Consumer confidence image, here)
Apple Inc (AAPL.O) shares led each of the three major indexes higher, up 2.83% ahead of its fourth-quarter results expected after markets closed.
Investors will keep a close watch on Apple’s earnings amid concerns of a disruption in iPhone production as the coronavirus spreads across major markets such as China.
Apple’s gains helped lift the S&P technology index 1.87% as the best performing sector on the day, while financial stocks gained 1.13% as a climb in Treasury yields helped big banks rebound.
The Dow Jones Industrial Average .DJI rose 186.3 points, or 0.65%, to 28,722.1, the S&P 500 .SPX gained 32.6 points, or 1.01%, to 3,276.23 and the Nasdaq Composite .IXIC added 130.37 points, or 1.43%, to 9,269.68.
The Dow snapped a five-session losing streak, its longest drought without a gain since early August.
Expectations for fourth-quarter earnings have been slowly improving and are now expected to show a decline of 0.4%, according to Refinitiv data. Of the 104 companies that have reported so far, 68.3% have topped expectations, lagging the average rate of 74% from the past four quarters.
Results were mixed on Tuesday, with U.S. industrial giant 3M Co (MMM.N) sliding 5.73% after it forecast 2020 profit below expectations as weak demand from China dents overall growth.
Pfizer Inc (PFE.N) dropped 5.13% after the drugmaker reported a lower-than-expected quarterly profit and said it would no longer rely on share repurchases to help drive growth.
Shares in Xerox Holdings Corp (XRX.N) jumped 4.94% after the company’s profit beat analysts’ estimates as it kept a tight lid on costs.
Advancing issues outnumbered declining ones on the NYSE by a 2.26-to-1 ratio; on Nasdaq, a 2.17-to-1 ratio favored advancers.
The S&P 500 posted 27 new 52-week highs and four new lows; the Nasdaq Composite recorded 66 new highs and 44 new lows.
About 6.75 billion shares changed hands in U.S. exchanges, compared with the 7.4 billion-share daily average over the last 20 sessions.
Reporting by Chuck Mikolajczak; Editing by Nick Zieminski and Jonathan Oatis