· S&P 500, Nasdaq mint record highs after strong U.S. data, waning virus fears
The benchmark S&P 500 posted a record closing high on Wednesday as U.S. stocks rallied for a third straight day on encouraging U.S. economic data and waning fears of the financial fallout from the corona virus in China.
The Nasdaq also notched a record close but steep losses in Tesla shares limited the index’s advance.
The Dow Jones Industrial Average .DJI rose 483.22 points, or 1.68%, to 29,290.85, the S&P 500 .SPX gained 37.1 points, or 1.13%, to 3,334.69 and the Nasdaq Composite .IXIC added 40.71 points, or 0.43%, to9,508.68.
The ADP National Employment Report showed private payrolls jumped by 291,000 jobs in January, the most since May 2015, while a separate report showed U.S. services sector activity picked up last month, suggesting the economy could continue to grow moderately this year even as consumer spending slows.
January’s job gains were the largest since May 2015. In addition, U.S. services sector activity picked up last month, with industries reporting increases in new orders. The Institute for Supply Management’s non-manufacturing activity index rose to 55.5 last month, the highest level since August.
· European stocks close higher despite coronavirus concerns; euro zone data surprises
European stocks closed higher on Wednesday, extending gains from earlier in the week despite the coronavirus outbreak.
The pan-European Stoxx 600 reversed early losses to close provisionally over 1% higher, with auto shares leading the gains while only telecoms traded in the red.
Reuters said a Chinese TV media outlet had reported that a research team at Zhejiang University had found an effective drug to treat people with the new coronavirus. The news agency, citing traders, suggested this was a reason for the move higher in stocks.
On the data front, final purchasing managers’ index (PMI) readings showed that euro zone business activity made a solid start to 2020, beating preliminary estimates to rise to a five-month high of 51.3 in January from December’s 50.9.
Germany led the positive surprises, its service sector growing at its strongest pace in five months to rise to 54.2 from 52.9 in December.
· Asia stocks set to jump as S&P 500 surges to record high despite virus fears
Stocks in Asia were traded higher on Thursday after the S&P 500 soared to a record high overnight on Wall Street.
Stocks in Japan jumped minutes after the market open, with the Nikkei 225 up 1.43% and the Topix index gaining 1.35%. South Korea’s Kospi also added 1.09%.
Meanwhile, stocks in Australia were higher in morning trade, as the S&P/ASX 200 gained around 0.7%. Investors will await the release of Australia’s retail sales data for December, expected to be out around 8:30 a.m. HK/SIN.
Overall, the MSCI Asia ex-Japan index traded 0.39% higher.
The moves came as investors reacted to overnight developments on the coronavirus outbreak, following unconfirmed reports of breakthroughs in the development of a drug for the disease.
Reuters cited reports on Wednesday that said a research team at Zhejiang University had found a drug to treat people infected by the new coronavirus. The World Health Organization, however, said in a statement: “There are no known effective therapeutics against this 2019-nCoV.”
Reference: CNBC, Reuters, Sky News
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