U.S. stocks on Thursday largely erased early losses that came after China, following a change in its methodology, reported a sharp rise in COVID-19 cases and deaths.
What are major indexes doing?
The Dow Jones Industrial Average DJIA, -0.24% was 67 points, or 0.2%, lower at 29,485, while S&P 500 index SPX, -0.04% dropped less than a point to 3,379. The Nasdaq Composite Index COMP, +0.00% was fractionally higher, at about 9,726.
All three major benchmarks posted record finishes on Wednesday and all three were off earlier lows.
What’s driving the market?
China on Thursday reported 254 new deaths from the virus over the past 24 hours, while the number of new cases jumped 15,152, after the government applied a new diagnostic method was applied in hard-hit Hubei province. The World Health Organization said Thursday that the total deaths from the outbreak stood at 1,369, while the total number of confirmed cases rose to 60,329.
Seema Shah, chief strategist at Principal Global Investors, said that the market may have exhibited a knee-jerk response to fresh reports on the outbreak. “The surge in reported cases reported today is a one-off change due to methodology and by itself, doesn’t imply an acceleration in the pace of infection,” she said in emailed comments.
“However, if the change in methodology does result in a rise in the growth rate of reported cases, market sentiment will inevitably deteriorate, reversing the more upbeat tone of recent days as markets had become increasingly reassured that the virus will soon plateau,” she said.
Meanwhile, in economic news, January consumer prices rose by a modest 0.1%, but ticked 0.2% higher once the figures were stripped out for food and energy prices. U.S. initial jobless claims for the week ending in Feb. 8 edged up 2,000 to 205,000, underlining the strength of the labor market.
On Capitol Hill, a pair of President Donald Trump’s nominees to the Federal Reserve Board of Governors — Judith Shelton and Christopher Waller — faced scrutiny from the Senate Banking Committee.
See: Democrats open campaign to defeat Trump Fed nominee Shelton
Which companies are in focus
- Cisco Systems Inc. shares CSCO, -5.67% were down 5.5% after it reported second-quarter profit and revenue late Wednesday that came in slightly above Wall Street forecasts.
- PepsiCo Inc. PEP, -0.72% reported a sharp fall in fourth-quarter earnings and revenue that topped expectations, while raising its dividend by 7%.
- MGM Resorts Interational MGM, -5.38% shares were 4.6% lower after the hotel and casino operator announced late Wednesday that Chief Executive Jim Murren will step down when his contract expires. The company also reported fourth-quarter results that disappointed on earnings.
- Shares of Bloom Energy Corp. BE, -8.60% fell 9% after the company announced late Wednesday that it would restate more than three years of financial statements due to miscalculations.
- Tesla Inc. shares TSLA, +3.40% slid after the electric vehicle maker on Thursday said it is planning to offer about $2 billion of common stock in an underwritten deal, but by late morning were trading nearly 3% higher.
- YETI Holdings Inc. shares YETI, -2.95% rallied Thursday after earnings.
- Southwest Airlines Co. LUV, -0.34% said Thursday it will extend the timeBoeing Co.’s BA, +0.12% 737 MAX planes are removed from flight schedules to Aug. 10 from June 6.
- Shares of Revolution Medicines Inc. RVMD, +66.47% roared about 75% higher after its trading debut.
- Ralph Lauren Corp. RL, -1.58% said fiscal 2020 sales could be hurt by $55 million to $70 million from the novel coronavirus outbreak.
What are other markets doing?
Oil prices erased early losses to turn higher. The price of a barrel of West Texas Intermediate crude for March delivery CLH20, +0.55% rose 37 cents, or 0.7%, to $51.54 a barrel on the New York Mercantile Exchange.
In precious metals, gold for April delivery GCJ20, +0.53% rose 0.4% to $1,578.50 an ounce on Comex.
The U.S. dollar DXY, -0.02% was virtually unchanged relative to a basket of a half-dozen currency rivals.
U.S. government bonds rallied, pushing yields lower, with the benchmark 10-year note rate TMUBMUSD10Y, -0.40% down 1 basis point at 1.62%. Bond prices rise as yields fall.
In Europe, the Stoxx Europe 600 SXXP, -0.02% shed 0.2%. The FTSE 100 FTSE, -0.95% was 0.5% higher.
In Asia overnight, the China CSI 300 000300, -0.62% fell 0.6%, the Shanghai Composite SHCOMP, -0.71% declined 0.7%, and the Hang Seng Index HSI, -0.34% closed 0.3% lower. Japan’s NIKKEI 225 Index NIK, -0.14% slipped 0.1%.