U.S. stocks stabilized Tuesday after posting their worst loss in months a day earlier on fears over the coronavirus outbreak.
The gains come as investors fretted over the potential impact the coronavirus could have on the global economy in recent trading sessions, particularly on industries including travel, tourism, restaurants and retail.
The death toll has risen to 106 in China and has sickened more than 4,500 people across the country. The virus has spread to a dozen countries. More than 70 cases have been confirmed outside of China, including five in the U.S.
Some analysts say it’s still too early to tell how the virus could affect corporate profits.
“If prior episodes of health emergencies are any guide, and assuming the coronavirus will ultimately be contained within a timeframe similar to prior episodes, the negative impact on economic activity and markets is likely to prove to be temporary,” David Joy, chief market strategist at Ameriprise Financial, said in a note.
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The Dow Jones industrial average rose 187.05 points, or 0.7%, to close at 28,722.85, after tumbling 454 points on Monday — its biggest drop since October. The Standard & Poor’s 500 rose 1% to end at 3,276.24, snapping two straight days of losses. The technology-heavy Nasdaq Composite added 1.4% to finish at 9,269.68.
Stronger-than-expected economic data helped boost investor sentiment Tuesday. Consumer confidence rose more than expected to a five-month high in January, the Conference Board said Tuesday, amid an unemployment rate that remains at a half-century low of 3.5%. The consumer confidence index rose to 131.6 this month from 126.5 in December.
Looking ahead, the Federal Reserve is expected to hold interest rates steady at a two day meeting that kicks off Tuesday and keep rates unchanged in the months ahead barring a “material” change in its outlook. Investors will parse the central bank’s statement on Wednesday, looking for further clues into officials’ outlook for the global economy after concerns about a slowdown in growth prompted them to cut rates three times last year.
The 10-year Treasury yield rose to 1.64% from 1.61% Monday.
Technology and bank stocks were among the biggest gainers.
Shares of Pfizer dropped 5% after the the drugmaker reported lower sales in the latest quarter. 3M, the maker of Post-it Notes, announced plans to eliminate 1,500 jobs to streamline its business operations. Its stock fell 5.7%
Overseas, European stock markets rebounded. Germany’s DAX rose 0.9% and Britain’s FTSE 100 added 0.9%. In Asia, Japan’s Nikkei 225 index lost 0.6%.