Wall Street recovery continues on China stimulus measures

By Medha Singh

(Reuters) – Gains in technology heavyweights helped Wall Street’s main indexes climb for the second day on Tuesday, with fresh intervention by China’s central bank calming investor nerves.

China injected 1.7 trillion yuan ($242.74 billion) via reverse repos on Monday and Tuesday, helping Chinese stocks reverse some losses and lifting the world equity index <.MIWD00000PUS>.

The stimulus boosted investor sentiment even as several economists cut their forecasts for 2020 global growth as the fast-spreading virus has hampered business operations in the world’s second largest economy.

“Investors seem to be reacting positively to the steps currently being taken by Chinese authorities,” said Art Hogan, chief market strategist at National Securities in New York.

“Whether the virus has a lasting impact on the broader global economy depends largely on the ability of the world’s major governments to effectively deploy resources to contain the outbreak.”

Nine of the 11 major S&P sectors were higher, led by a 1.7% rise in energy stocks <.SPNY> as oil prices rebounded.

A more than 1.5% rise in shares of Apple Inc and Microsoft Corp helped the technology <.SPLRCT> index climb 1.8%.

But Alphabet Inc slipped 3.4% after Google’s advertising business and new data about YouTube and Google Cloud broadly disappointed.

At 9:49 a.m. ET the Dow Jones Industrial Average <.DJI> was up 444.78 points, or 1.57 percent, at 28,844.59, the S&P 500 <.SPX> was up 46.03 points, or 1.42 percent, at 3,294.95 and the Nasdaq Composite <.IXIC> was up 137.94 points, or 1.49 percent, at 9,411.34.

U.S. stocks rebounded on Monday, supported by a surprise expansion in domestic factory activity following the S&P 500’s <.SPX> worst weekly decline in six months.

Fears about the economic impact of the coronavirus outbreak have overshadowed a largely positive fourth-quarter earnings season. About 70% of nearly half of the S&P 500 companies that have reported so far have surpassed earnings estimates.

Ralph Lauren Corp jumped 6.4% after the retailer’s holiday-quarter profit beat market expectations.

Health insurer Centene Corp slipped about 0.5%, weighed down by a surge in quarterly medical costs.

Investors were also eyeing the U.S. Democratic presidential nominating race that got off to a chaotic start on Monday, with officials blaming “inconsistencies” for an indefinite delay in the state’s caucus results.

Advancing issues outnumbered decliners by a 4.63-to-1 ratio on the NYSE and by a 4.71-to-1 ratio on the Nasdaq.

The S&P index recorded 43 new 52-week highs and two new lows, while the Nasdaq recorded 71 new highs and 14 new lows.

(Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva and Arun Koyyur)