By Medha Singh
(Reuters) – Wall Street’s main indexes were set to open sharply higher on Tuesday, marking a second day of recovery from a coronavirus-driven sellfoff last week, with fresh intervention by China’s central bank calming investor nerves.
In a bid to cushion the economic blow of the epidemic, China injected 1.7 trillion yuan ($242.74 billion) via reverse repos on Monday and Tuesday, helping Chinese stocks reverse some losses and lifting the world equity index ().
The monetary intervention boosted investor sentiment even as several economists cut their forecasts for 2020 global growth, with the spread of coronavirus showing no signs of slowing. The death toll from the outbreak has surpassed 420, with businesses suspending their operations in China.
“Investors seem to be reacting positively to the steps currently being taken by Chinese authorities,” said Art Hogan, chief market strategist at National Securities in New York.
“Whether the virus has a lasting impact on the broader global economy depends largely on the ability of the world’s major governments to effectively deploy resources to contain the outbreak.”
Of the 30 Dow-listed industrial components (), 28 were trading higher, led by a more than 2% gain for technology behemoths Intel Corp (O:) and Apple Inc (O:).
But Alphabet Inc’s (O:) shares slipped 4% after Google’s advertising business and new data about YouTube and Google Cloud broadly disappointed.
At 8:50 a.m. ET, were up 374 points, or 1.32%.
U.S. stocks rebounded on Monday, supported by a surprise expansion in domestic factory activity following the S&P 500’s () worst weekly decline in six months.
Fears about the coronavirus outbreak have overshadowed a largely positive fourth-quarter earnings season. About 70% of nearly half of the S&P 500 companies that have reported so far have surpassed earnings estimates.
Ralph Lauren Corp (N:) jumped 6.8% after the retailer’s holiday-quarter profit beat market expectations.
Health insurer Centene Corp (N:) slipped about 4%, weighed down by a surge in quarterly medical costs.
Tesla Inc (O:) jumped 12.8%, building on a near 20% surge on Monday. Billionaire investor Ron Baron said the electric carmaker’s revenue will be more than $1 trillion in 10 years.
Investors were also eyeing the U.S. Democratic presidential nominating race that got off to a chaotic start on Monday, with officials blaming “inconsistencies” for an indefinite delay in the state’s caucus results.
In economic news, data at 10 a.m. ET is likely to show U.S. factory orders rose 1.2% in December after a 0.7% slip in the prior month.
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