By Yasin Ebrahim
Investing.com – Wall Street retreated from session highs as Federal Reserve Chairman Jerome Powell expressed confidence in the central bank’s current monetary policy measures in the wake of the coronavirus outbreak, while mixed earnings from corporates did little to help sentiment.
The rose 0.53%, added 0.73% and the 0.14%.
Against rising investor hopes the Fed will contain the impact from any weakness on global growth caused by the coronavirus, named Covid-19 by the World Health Organization today. Powell appeared in no rush to hint that the Fed is mulling rate cuts and insisted it was yet too early to determine the impact from the virus on growth.
“We’ll be watching this (coronavirus impact) carefully,” Powell told lawmakers on the House Financial Services Committee. “‘What will be the effects on the U.S. economy?’ ‘Will they be persistent?’ ‘Will they be material?’ That’s really the question,” Powell said.
Despite the rising death roll in China and infections, market participants continue to bet that the virus’ impact on the U.S. economy will be limited.
“While economic fallout on China from the virus will matter to the U.S. economy, at this point, we expect most of the drag on U.S. growth to be in the first quarter, with a smaller hit in the second,” S&P Global said in a note.
Despite the optimism over efforts to contain the Covid-19, which has killed more than 1,000 and infected more than 40,000, corporate earnings are reflecting the threat of the virus to the bottom line.
Under Armour (NYSE:) slumped nearly 20% after reporting mixed earnings and warning that sales would come under pressure from Covid-19.
Hasbro (NASDAQ:), meanwhile, pared gains to trade roughly flat after the toymaker reported earnings that topped Wall Street estimates.
In tech, Facebook (NASDAQ:) struggled to turn positive after Pivotal Research downgraded the stock to sell from hold and lowered its target price to $180 from $215.
“We think the Street is being way too complacent regarding the impact of the Google (NASDAQ:) Chrome changes made on Feb 4…with its Chrome 80 release,” Pivotal said.
Elsewhere, Boeing (NYSE:) gave up gains early-day gains after the aircraft maker said that it booked no new jetliner orders in January, as it continues efforts to restore its reputations following the 737 Max crisis.
Energy, meanwhile, rebounded from recent weakness amid an upswing in oil prices on rising hopes that Russia would support OPEC+ proposals for deeper production cuts to offset the impact of the coronavirus on Chinese oil demand.
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