U.S. Stocks Advance After WHO Coronavirus Remarks: Markets Wrap

(Bloomberg) -- U.S. stocks advanced and bonds retreated after the World Health Organization stepped up efforts to combat the deadly coronavirus by declaring an international health emergency.

The S&P 500 Index erased losses after WHO said travel and trade restrictions weren’t necessary, removing at least temporarily a threat to the global economy. The organization also commended China’s efforts to contain the disease. The declaration came after the U.S. reported the first case of human-to-human transmission of the virus. Equities have been under pressure since the outbreak last week, while havens from Treasuries to gold have rallied as investors fretted the infection would derail fragile growth around the world.

While the virus continues to spread and the human toll mounts, the WHO comments suggested that efforts to contain the outbreak are robust. For investors worried about the impact on global growth, that was enough to halt a flight from risk assets in the final hour of U.S. equity trading.

“The market maybe doesn’t really know how to process the impact of this particular event,” Kathryn Kaminski, chief research strategist at AlphaSimplex Group, said by phone. “People may be moving on headlines or there may also be general concern about not being sure what this means.”

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Traders also assessed a flurry of corporate earnings, with a rally in Microsoft Corp., Tesla Inc. and Coca-Cola Co. driven by solid results offsetting United Parcel Service Inc. and Facebook Inc.’s declines.

Companies reporting after the U.S. market close:

• Amazon.com Inc. surged after the closing bell as earnings and revenue from the key holiday quarter beat Wall Street estimates.
• Electronic Arts Inc. tumbled after the video-game company’s forecast for the current quarter came in below analysts’ projections.
• Visa Inc. said the incentives it hands out to banks and retailers will climb faster than revenue and are on track to be at the high end of its targeted range for 2020.
• Amgen Inc.’s sales fell as some of its top drugs faced competition from lower-priced rivals.

Elsewhere, China’s offshore yuan briefly weakened past 7 for the first time this year. Oil slumped on growing alarm that the viral outbreak is crippling demand, prompting OPEC to consider an emergency meeting. Copper posted a record 12-day losing streak in London. The pound jumped just before the Bank of England surprised the market by voting 7-2 to keep its key rate unchanged.

Here are some events to watch out for this week:

• South Korean chipmaker SK Hynix, Chevron, Caterpillar and Exxon Mobil report earnings on Friday.
• The U.K. is scheduled to leave the European Union Friday.

These are some of the main moves in markets:

Stocks

• The S&P 500 advanced 0.3% as of 4 p.m. New York time.
• The Stoxx Europe 600 Index decreased 1%.
• The MSCI Emerging Market Index dipped 2.3%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%.
• The euro rose 0.2% to $1.1032.
• The Japanese yen was little changed at 108.97 per dollar.

Bonds

• The yield on 10-year Treasuries rose one basis point to 1.59%.
• Germany’s 10-year yield dipped three basis points to -0.41%.
• Britain’s 10-year yield climbed three basis points to 0.542%.

Commodities

• The Bloomberg Commodity Index dipped 0.9%.
• West Texas Intermediate crude sank to $52.14 a barrel.

--With assistance from Andreea Papuc, Adam Haigh, Sam Potter, Vildana Hajric, Katherine Greifeld, Anchalee Worrachate, Liz Capo McCormick, Yakob Peterseil, Sophie Caronello and Nancy Moran.

To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Rita Nazareth

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