Published: Sat, January 25, 2020
Markets | By Otis Pena

U.S. stocks close mostly higher, led by tech, industrials

U.S. stocks close mostly higher, led by tech, industrials

The pan-European Stoxx 600 and UK's FTSE both were down 0.4 per cent. Futures on the US S&P 500, Nasdaq and Dow were also pointing to a lower open.

A deadly new virus that emerged in China is raising concerns beyond the public health sphere as experts warn about the potential economic cost of a global outbreak that is already drawing comparisons to the deadly SARS epidemic 17 years ago. Fears that the coronavirus could spread, dampening tourism and economic growth, has weighed on global markets this week, driving up demand for U.S. government bonds and safe-play stocks. American Airlines Group Inc fell 2.9%, despite reporting a better-than-expected profit.

Concerns over the China coronavirus also spread to European markets on Thursday, where investors were already trading on worries that the EU is the next target on President Donald Trump's trade list.

"So the market took a little bit of solace in that and has been steadily creeping higher for the balance of the afternoon", said Mike Archibald, associate portfolio manager with AGF Investments Inc. The index had been down as much as 0.6 percent earlier in the day.

The Dow slipped 26.18 points, or 0.1%, to 29,160.09.

The Nasdaq composite gained 12.96 points, or 0.1%, to 9,383.77. The index, which is heavily weighted with technology stocks, previously hit a record high Friday.

Asian markets bore the brunt of the effects, with Hong Kong's Hang Seng Index down 1.52 per cent, the Shanghai Stock Exchange plunging 2.75 per cent and the Tokyo Stock Exchange down 0.78 per cent.

The yield on 10-year Treasuries dipped four basis points to 1.73%.

The main indexes retreated from record highs on Tuesday after officials confirmed the first US case of the coronavirus. The World Health Organization postponed until Thursday a decision on whether to declare an worldwide emergency over the outbreak of the flu-like illness, which can cause pneumonia and other severe respiratory symptoms, including one case in the United States.

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Sentiment began to shift around noon when the World Health Organization said it decided against declaring the outbreak a global emergency for now. Almost 70% of the 74 companies that reported results through Thursday morning have beaten analysts' expectations, according to FactSet.

The S&P 500 is down 7.87 points, or 0.2%.

Industrial stocks also rose, with several airlines among the gainers. Strong travel demand resulted in record occupancy levels on its planes, though the airline noted it had to cancel about 10,000 flights during the fourth quarter because of the grounding of the Boeing 737 Max jets.

On the other hand, the defensive sectors, Real Estate and Utilities, are posting modest daily gains to confirm the risk-off atmosphere.

Corporate earnings accounted for the biggest swings in individual stocks though. Edwards LifeSciences, which makes heart valves, dropped 4.8 percent.

Energy was weakest, falling with declining crude oil prices. Pioneer Natural Resources dropped 2.9%.

The S&P 500 ended slightly higher and the Nasdaq eked out a record closing high on Thursday, helped by a jump in Netflix, while news about the coronavirus outbreak spreading from China and mixed earnings results kept a lid on the market.

Benchmark crude oil fell $1.15 to $55.59 a barrel.

On the macroeconomic calendar, overall mortgage application volume in the U.S. fell 1.2% last week, according to the Mortgage Bankers Association. Shares of the chip maker rose 1.5% ahead of the report. Shares fell in India, Jakarta and Malaysia but rose in Taiwan and Singapore.

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