By Caroline Valetkevitch
NEW YORK (Reuters) – The S&P 500 and Nasdaq rose to record closing highs on Wednesday as optimism that China would take more measures to prop up its economy eased concerns about the economic impact of the coronavirus epidemic.
Stocks held gains following the release of minutes from the U.S. Federal Reserve’s last policy meeting, which showed policymakers were cautiously optimistic about their ability to hold interest rates steady this year while acknowledging new risks caused by the virus outbreak.
The number of new coronavirus cases dropped for a second straight day in China.
China is widely expected to cut its benchmark lending interest rate on Thursday, which would add to measures aimed at limiting the impact from business shutdowns and travel curbs on the world’s second-largest economy.
“It sounds as though investors are breathing a sigh of relief that they believe the worst of the coronavirus is behind us,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.
“Investors are feeling emboldened because central banks have got their back,” he added.
Apple Inc (O:AAPL) rose 1.4%, recouping most of the losses in the previous session after a surprise sales warning that highlighted concerns about the coronavirus’ impact on global supply chains.
Oil prices overall gained 2% on the back of slowing coronavirus cases.
“There seemed to be a number of high-profile companies that were talking about coronavirus and the potential for it to impact earnings. Today, investors are perhaps looking at markets with more thoughtfulness, recognizing (there’s) policy support and some good news coming from the infection rates,” said Kristina Hooper, chief global market strategist at Invesco in New York.
The Dow Jones Industrial Average (DJI) rose 115.84 points, or 0.4%, to 29,348.03, the S&P 500 (SPX) gained 15.86 points, or 0.47%, to 3,386.15 and the Nasdaq Composite (IXIC) added 84.44 points, or 0.87%, to 9,817.18.
Also helping the technology sector was a 6.1% gain in chipmaker Nvidia Corp (O:NVDA) after Bernstein raised its shares to “outperform.”
Among other stocks, Garmin Ltd (O:GRMN) jumped 6.7% after the wearable fitness device maker forecast full-year revenue above analysts’ estimates.
Advancing issues outnumbered declining ones on the NYSE by a 1.31-to-1 ratio; on Nasdaq, a 1.54-to-1 ratio favored advancers.
The S&P 500 posted 77 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 169 new highs and 57 new lows.
Volume on U.S. exchanges was 7.22 billion shares, compared to the 7.57 billion average for the full session over the last 20 trading days.