US open: Stocks record early gains despite lingering coronavirus fears
Trading got off to a positive start 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.
As of 1530 GMT, the Dow Jones Industrial Average was up 1.50% at 28,826.94, while the S&P 500 was 1.29% stronger at 3,290.97 and the Nasdaq Composite came out the gate 1.44% firmer at 9,406.53.
The Dow opened 427.13 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.
Sentiment has been battered by the virus of late; however, companies exposed to China, like Apple and various chipmakers, rose in early trade. Airlines and Carnival, which confirmed on Monday that a former cruise-line passenger tested positive for the virus, also recorded some gains at the bell.
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.
Oanda's Edward Maya said: "Global indexes are positive, commodities are showing signs of life, yet the virus continues to spread at a rapid pace, as containment efforts are stepped up. Today's green on the screen started off in Asia, China is showing they mean business with their liquidity injections.
"The coronavirus has yielded its second death outside mainland China and continues to spread as the confirmed case count rises to 20,438. The news is hardly uplifting on the virus front, so today's bounce may not go much further. The world’s second-largest economy is shutdown and it will be tough to see US stocks recapture record high territories until the virus peaks."
In corporate news, Alphabet shares were down 4.01% at the bell after missing on revenues in its fourth-quarter report card, while Tesla shares surged 14.74% in the morning session, continuing the firm's solid run.
Sony shares were up 2.40% after the firm raised its outlook due to strong demand for its sensors, while Ralph Lauren shares shot up 9.74% after strong interest in the group's winter collection helped it beat revenue estimates.
Chubb, Disney, Ford and Chipotle will all post earnings after the close.
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.