Stocks Shake Off Virus Dread in Busy Earnings Week: Markets Wrap

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(Bloomberg) — U.S. stocks climbed the most since October on speculation that efforts to contain the coronavirus will prevent a major economic fallout.

The S&P 500 Index rebounded from its worst sell-off in four months, with technology shares leading the charge. Some of the companies that suffered the biggest losses during the latest equity rout, such as chipmakers, casino operators and airlines, advanced on Tuesday. Demand for havens cooled, sending Treasuries and gold lower. After the close of regular trading, Starbucks Corp (NASDAQ:). reported earnings that beat analyst estimates.

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Equities rallied after a slide that wiped about $1.5 trillion off the value of world stocks since Jan. 20. As it’s too early to assess the full impact of the deadly virus, traders digested some positive readings on U.S. consumer confidence and home prices. With earnings continuing to roll in, investors will be looking for signs of how the disease is affecting operations in China.

“We kind of stall a little bit on the Chinese recovery, but we have a lot of other things going in favor of a global recovery anyway,” Stephen Auth, chief investment officer of equities at Federated Investors, told Bloomberg TV. “We still think that’s coming.”

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Some corporate highlights:

  • PulteGroup Inc (NYSE:). climbed after reporting better-than-expected quarterly orders.
  • Lockheed Martin Corp (NYSE:). rose on sales that beat the highest estimate.
  • Acceleron Pharma Inc. surged on mid-stage results for its medicine aimed at treating a type of lung and heart disorder.
  • 3M (NYSE:) Co. sank after revealing it had received a grand jury subpoena in an environmental probe and saying it would cut 1,500 jobs.
  • Harley-Davidson Inc (NYSE:). slid after quarterly profit missed estimates.
  • Pfizer Inc. (NYSE:) tumbled as a drop in sales overshadowed the company’s projections for a better-than-feared 2020.

Here are some events to watch out for this week:

  • Wednesday brings reports from GE, Boeing (NYSE:) and Facebook (NASDAQ:); Samsung Electronics (KS:), International Paper, Unilever (LON:) and Shell (LON:) report on Thursday, followed by South Korean chip maker SK Hynix, Chevron (NYSE:), Caterpillar (NYSE:) and Exxon Mobil (NYSE:) all on Friday.
  • Federal Reserve policy makers on Wednesday are expected to open 2020 the same way they closed 2019 — by holding rates steady.
  • Goldman Sachs (NYSE:) will hold its first-ever Investor Day on Wednesday.
  • The Bank of England meeting on Thursday is highly anticipated after a series of dovish comments raised speculation policy makers could lower interest rates.
  • The U.S. reports fourth-quarter GDP Thursday.
  • The U.K. is scheduled to leave the European Union Friday.

These are the main moves in markets:

Stocks

  • The S&P 500 climbed 1% as of 4 p.m. New York time.
  • The Index rose 0.8%.
  • The MSCI Emerging Market Index was little changed.

Currencies

  • The Bloomberg Dollar Spot Index decreased 0.1%.
  • The euro was unchanged at $1.1019.
  • The Japanese yen weakened 0.2% to 109.14 per dollar.

Bonds

  • The yield on 10-year Treasuries rose four basis points to 1.65%.
  • Germany’s 10-year yield climbed four basis points to -0.34%.
  • Britain’s 10-year yield jumped four basis points to 0.552%.

Commodities

  • The Bloomberg Commodity Index advanced 0.1%.
  • West Texas Intermediate crude rose to $53.48 a barrel.
  • Gold decreased 0.5% to $1,575.80 an ounce.
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