Stocks bounce back as fears ease about China virus outbreak
Stocks are rebounding from yesterday's selloff as markets welcome China's transparency in dealing with the new coronavirus outbreak originating in Wuhan, including its statements that this new strain does not seem as deadly as the previous SARS outbreak. On the earnings front, Netflix (NFLX) and IBM (IBM) are front-and-center following their reports last night.
ECONOMIC EVENTS: In the U.S., the FHFA house price index rose 0.2% to 281.2 in November. Existing home sales rebounded 3.6% to a 5.54M home rate in December, which was better than expected. The Chicago Fed's national activity index for December fell 0.76 points to a negative 0.35 reading.
TOP NEWS: Shares of IBM are up 3% following what Citi analyst Jim Suva called an "impressive" fourth quarter report. IBM trends are improving, says the analyst, though he keeps a Neutral rating on Big Blue as he waits to see if the company can improve its signings to return to more sustained positive growth.
Shares of Netflix are slipping 2% after the company reported quarterly results last night. While Netflix beat on the top and bottom lines, the streaming giant gave disappointing guidance for the first quarter. Additionally, the company acknowledged increased competition in the U.S. that should become more intense globally after the Disney+ (DIS) service launches across Europe in March.
Apple's (AAPL) suppliers intend to start assembling a new low-cost iPhone in February and the company is expected to officially reveal the new phone as early as March, according to Bloomberg's Debby Wu and Mark Gurman.
In M&A news, Eaton (ETN) announced it has agreed to sell its Hydraulics business to Danfoss A/S, a Danish industrial company, for $3.3B in cash.
MAJOR MOVERS: Among the noteworthy gainers was Abbott (ABT), which rose 2.5% after it reported quartelry results and provided fiscal 2020 guidance.
Also higher after reporting quarterly results was Navient (NAVI), which gained 9%.
Among the notable losers was Arconic (ARNC), which slid 3% after Longbow analyst Chris Olin downgraded the stock to Underperform from Neutral with a $24 price target.
Also lower were FuelCell (FCEL) and Northern Trust (NTRS), which fell 25% and 6%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was up 13.63, or 0.05%, to 29,209.67, the Nasdaq was up 43.50, or 0.46%, to 9,414.30, and the S&P 500 was up 7.23, or 0.22%, to 3,328.02.