The S&P 500 and the Nasdaq have scaled new highs as an upbeat forecast from IBM added to optimism over earnings, while China’s efforts to contain a virus outbreak eased worries about a wider financial fallout.
IBM shares jumped 4.1 per cent after it forecast full-year profit above market expectations on the strength of its high-margin cloud computing business.
Technology stocks, which have played a main role in Wall Street’s recent record run, rose 0.8 per cent on Wednesday.
Investors brushed aside fears from China’s new deadly flu-like virus after President Xi Jinping said curbing the outbreak and saving lives was a top priority.
The main indexes retreated from record highs on Tuesday after officials confirmed the first US case of the coronavirus.
Art Hogan, chief market strategist at National Securities in New York, said China’s commitment to control the outbreak seemed to have eased investors’ concerns.
“While the death toll has risen to nine, it feels like affirmation we’re getting out of China is stemming fears that this is turning into an epidemic,” he said.
The outbreak, which revived fears of a pandemic similar to the Severe Acute Respiratory Syndrome (SARS) in 2003, roiled travel and airline stocks on Tuesday, as millions of people prepared to travel for the Chinese Lunar New Year.
Netflix’s shares gave up gains to trade 3.1 per cent lower after the streaming video pioneer beat estimates for quarterly subscription growth, but warned of a tough first quarter.
“Being in the fourth-quarter earnings season is going to be the tell. We’re going to find out if we’ve gotten ahead of ourselves or valuations are justified,” Hogan said.
At 10.12am local time, the Dow Jones Industrial Average rose 0.29 per cent to 29,280.61.
The S&P 500 gained 0.36 per cent to 3332.60 and the Nasdaq Composite was up 0.54 per cent at 9421.75.
Chip stocks benefited from a strong forecast from Dutch firm ASML Holding, the latest large chipmaker to indicate a recovery in the sector.
The Philadelphia Semiconductor index rose 1.2 per cent.
Among the weak spots was Johnson & Johnson, dropping 1.9 per cent after the healthcare conglomerate forecast full-year profit largely below expectations.
Boeing extended losses, down 0.9 per cent, after announcing further delay in the return of its 737 MAX jets to service.
Advancing issues outnumbered decliners by a 1.74-to-1 ratio on the NYSE and a 1.47-to-1 ratio on the Nasdaq.
The S&P index recorded 94 new 52-week highs and one new low, while the Nasdaq recorded 119 new highs and 13 new lows.