(Reuters) – The S&P 500 and the Nasdaq indexes hit record highs on Tuesday as a top Chinese health adviser sparked expectations that the coronavirus outbreak may be peaking, while T-Mobile shares jumped after a federal judge approved its purchase of Sprint.
T-Mobile US climbed 11.2% to the top of the benchmark S&P 500, while Sprint shares surged 73.8%. Larger rival Verizon Communications Inc slipped 0.5%, weighing on the communication services sector. AT&T Inc rose 1.1%.
After more than 1,000 deaths and weeks of uncertainty that roiled global financial markets, China’s foremost medical adviser on the epidemic said infections may be over by April, with the number of new cases already declining in some places.
However, the hit to the world’s second-largest economy was still unclear as factories struggled to resume production after an extended holiday.
“For the time-being, investors are willing to say ‘we are going to invest in what we know’ and what we know right now is that the U.S. economy is in pretty good shape, earnings have been better than expected and the Fed continues to have our back,” said Art Hogan, chief market strategist at National Securities in New York.
Federal Reserve Chair Jerome Powell was fairly upbeat about the outlook for the U.S. economy in his prepared remarks to Congress on Tuesday, but cited a potential threat from the coronavirus outbreak.
The communication services sector was the only major S&P sector in the red. Cyclical sectors such as technology and financials provided the biggest boosts to the benchmark index.
At 9:58 a.m. ET, the Dow Jones Industrial Average rose 0.29% to 29,361.15 and the S&P 500 gained 0.43% to 3,366.58. The Nasdaq Composite was up 44.29 points, or 0.46%, at 9,672.68.
The fourth-quarter earnings season has been largely upbeat, with about 71% of the 324 S&P 500 companies that have reported beating profit estimates.
Hasbro Inc rose 2% on better-than-expected quarterly profit, but Under Armour Inc tumbled 16.2% after it forecast a surprise drop in 2020 revenue.
Advancing issues outnumbered decliners by a 3.40-to-1 ratio on the NYSE and by a 2.17-to-1 ratio on the Nasdaq.
The S&P index recorded 68 new 52-week highs and no new lows, while the Nasdaq recorded 107 new highs and 29 new lows.
Reporting by Medha Singh and Shreyashi Sanyal in Bengaluru; Editing by Bernard Orr and Sriraj Kalluvila