US close: Dow bounces back from Friday sell-off, closes 400 points higher
Stocks closed sharply higher on Monday as US stocks attempted to regain some of the heavy losses recorded on Friday after China's fast-spreading coronavirus sparked a sell-off on the Street.
At the close, the Dow Jones Industrial Average was up 1.44% at 28,807.63, while the S&P 500 was 1.50% stronger at 3,297.59 and the Nasdaq Composite saw out the session 2.10% firmer at 9,467.97.
The Dow closed 407.82 points higher on Tuesday after recording some solid gains in the previous session as stocks attempted to bounce back from the heavy selling seen at the end of the previous week, despite ongoing fears regarding the global spread of the Wuhan coronavirus.
The tech-heavy Nasdaq was the first of the major indices to completely bounce back from the coronavirus-related fears and ended the session at yet another all-time high, while Microsoft and Caterpillar both rose roughly 3% to contribute to Tuesday's gains on the S&P 500.
Sentiment has been battered by the virus of late; however, companies exposed to China, like Apple and chipmakers Nvidia and Micron, rose in early trade. Airlines American United and Carnival, which confirmed on Monday that a former cruise-line passenger tested positive for the virus, also recorded some gains on Tuesday.
The virus death toll has reached 426, with 20,679 confirmed cases in China alone but Atlanta Federal Reserve Bank President Raphael Bostic said his outlook for the US economy had not been affected by the outbreak in any way.
A report from Reuters that suggested China's central bank may very well cut its key lending rate and reserve requirement ratios at some point in the coming weeks in order to support economic growth also boosted sentiment.
CMC Markets analyst David Madden said: "Equity markets are higher again as traders are taking their cues from China – where stocks rebounded from the brutal losses that were endured yesterday.
"The coronavirus crisis is, unfortunately, getting worse, but the authorities in China have been doing their bit to reassure investors. The Securities Times, a state-controlled newspaper, called for calm in the markets. It was also reported that in the past 48 hours the regulator of the financial markets has imposed restrictions in relation to short-selling"
In corporate news, Alphabet shares were down 2.51% at the close after missing on revenues in its fourth-quarter report card, while Tesla shares surged 13.73% in the morning session, continuing the firm's solid run.
Sony shares were up 3.58% after the firm raised its outlook due to strong demand for its sensors, while Ralph Lauren shares shot up 9.20% after strong interest in the group's winter collection helped it beat revenue estimates.
On the macro front, new orders for US manufactured durable goods increased 2.4% in January, rebounding from an upwardly revised 3.1% in the previous month and beating forecasts of a 0.4% rise.
The jump was the biggest recorded since August of 2018, according to the Commerce Department - mostly due to a surge in military orders after Congress approved a higher military budget.