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Stock Market News for Feb 12, 2020

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The S&P 500 and the Nasdaq recorded new highs on Tuesday as investors cheered to Chinese health advisers’ remark that coronavirus outbreak may be peaking. However, the Dow remained unchanged and investors kept a close watch on the Federal Reserve Chairman’s remarks about coronavirus’ economic impact.

The Dow Jones Industrial Average (DJI) fell 0.48 points, to close at 29,276.34 and the S&P 500 rose 5.66 points, or 0.2% to close at of 3,357.75. While, the Nasdaq Composite Index closed at 9,638.94, gaining 10.55 points, or 0.1%. The fear-gauge CBOE Volatility Index (VIX) decreased 3.4% to close at 14.66. Advancing issues outnumbered declining one for a 2.69-to-1 ratio on the NYSE and a 1.93-to-1 ratio on the Nasdaq favored advancers.

How Did the Benchmarks Perform?

The S&P 500 and the Nasdaq ended in the green boosted by cyclical sectors such as technology and consumer discretionary as Chinese factories get back to business slowly and fears of coronavirus reduces.

Additionally, communication stocks jumped after a federal judge approved the merger of T-Mobile US, Inc. (TMUS - Free Report) and Sprint Corporation (S - Free Report) for $26 billion. Shares of T-Mobile US and Sprint jumped 11.8% and 77.5%, respectively yesterday. Both the companies carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The news of merger also boosted the shares of cell tower operators as investor expect that the merger will result in additional cell-tower sites. Shares of SBA Communications Corporation (SBAC - Free Report) , American Tower Corporation (AMT - Free Report) and Crown Castle International Corp. (CCI - Free Report) rose 7.3%, 4.3% and 5.3%, respectively.

Slowdown of New Cases of COVID-19

On Feb 11, the World Health Organization (WHO) termed China’s coronavirus officially as Covid-19. The “Co” stands for corona, “vi” is virus, “d” is for disease, and 19 represents the year in which the outbreak began.

China’s National Health Commission, reported on Tuesday that more than 42,638 people has been infected by Covid-19, along with death toll rising to over 1,016 in mainland China. On the brighter side, number of new, confirmed cases fell to 2,478 from 3,062 on Feb 11 and top Chinese health adviser remarked that the coronavirus outbreak may be peaking.

Fed Monitoring Impact of Coronavirus

On Feb 11, Jerome Powell, Chairman of the Federal Reserve addressed the House Financial Services Committee, that the central bank of the United States is “closely monitoring” the coronavirus situation, to access its impact on China and the global economy.

He also testified that it is “too early to say” how the virus would impact the American economy. However, the Fed believes that the U.S. economy is resilient to overseas headwinds, lifted by strong economic data.

Economic Data

On Feb 11, the National Federation of Independent Business reported that index of small-business optimism rebounded to 104.3 points in January, above the December’s reading of 102.7. However, the number of job openings in the United States declined to a two-year low of 6.42 million in December from 6.79 million.

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