S&P 500 Reaches New Record As Stocks Recover From Coronavirus Fears

The index is now up 1.2% for the year

ФОТО: Depositphotos.com/AndreyPopov

Topline: The stock market continued to rally higher on Wednesday, as the S&P 500 hit a new record close and the Dow rose almost 500 points, with stocks now recovering most of their losses related to the coronavirus during the past two weeks.

  • The S&P 500 index rose 1.1% on Wednesday, hitting a new record closing high of 3334.69 and fully erasing its losses stemming from fears over the coronavirus and its impact on businesses and the global economy.
  • The Dow Jones Industrial Average jumped nearly 500 points, gaining 1.7% and putting the index back within reach of its pre-coronavirus levels.
  • The Nasdaq Composite index, on the other hand, lagged both the Dow and S&P 500, gaining only 0.4%. 
  • The Nasdaq was held back in large part because Tesla shares, which soared up to 50% earlier this week, plunged by almost 20% on Wednesday—its worst day ever—amid reports that the coronavirus would impact production and deliveries at its factory in Shanghai, China. Even with Wednesday’s record plunge, Tesla stock is still up more than 70% in 2020.
  • Adding to the good news for the market on Wednesday was a report from ADP and Moody’s Analytics, which said that U.S. private payrolls rose by 291,000 in January—almost twice the expected number and the biggest monthly payroll gain in almost five years.
  • All three major indexes have now posted gains for the third day in a row, marking a recovery from a huge sell-off on coronavirus fears last Friday when the Dow shed 600 points and posted its worst single-day drop since August 2019, while the S&P 500 saw its largest decline since October.

Crucial statistics: The S&P 500 has now fully recovered from its coronavirus-related losses, turning positive for 2020 so far. The index is now up 1.2% for the year. The best-performing index so far is the Nasdaq, however, thanks to its 4.1% rise in 2020. The Dow, on the other hand, is attempting to climb back from earlier losses and turn positive for the year: It is now down 0.2% so far this year.

Big numbers: The fast-spreading and deadly coronavirus has now outpaced the level of severity seen with the 2002-2003 SARS outbreak. As of Wednesday, the disease has infected nearly 25,000 people and killed 490. 

Crucial quote: “Stocks enjoyed another day of strong gains,” Vital Knowledge founder Adam Crisafulli wrote in a note on Wednesday. “The bullish narrative that’s been driving stocks since late 2019 is firmly back in control of the tape after taking a brief pause during the final days of January.”

What to watch for: The coronavirus’ continuing impact on businesses, especially those with heavy exposure to China. “The coronavirus-linked work stoppages and travel restrictions will have a material impact on global growth,” Crisafulli recently predicted.

Forbes.com

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