Stocks - S&P Notches Record Close on Bets China Stimulus Will Curb Virus Impact

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Stocks - S&P Notches Record Close on Bets China Stimulus Will Curb Virus Impact
Credit: © Reuters.

By Yasin Ebrahim – The S&P and Nasdaq closed at record highs on Wednesday on hopes of fresh stimulus from Beijing to curb the coronavirus impact, which is showing signs of slowing in China.

The S&P 500 rose 0.47%, the Nasdaq Composite surged 0.87% and the Dow Jones Industrial Average added 0.40%.

China reported 1,749 confirmed new cases of Covid-19 on Wednesday, marking the lowest number of newly confirmed cases since Jan. 29 and the second-straight day infections have remained under 2,000.

The update arrived as the Bank of China hinted at fresh stimulus to fend off the impact of the virus, with reports suggesting that easing may be delivered as soon as Thursday.

"The fundamentals of China's economy have not changed," the People's Bank of China said. "China's economy, however, also faces several challenges but will fend off major financial risks."

Easing Covid-19 fears triggered a wave of green across energy stocks amid a climb in oil prices, setting up the broader market for a record day.

In tech, chip stocks rallied strongly as investors bet that supply chain disruption would be limited after China's Ministry of Industry and Information Technology reportedly vowed to help businesses that were impacted.

The Philadelphia Semiconductor Index closed 2.6% higher, led by a 6% rise in Nvidia (NASDAQ: NVDA ).

Bernstein upgraded its rating on Nvidia to outperform from market perform and hiked its price target on the company to $360 per share from $300 per share, sending its shares to an all-time high.

Tesla (NASDAQ: TSLA ) also supported the rally after Piper Sandler raised its price target on the stock to $928 from $729, sending the electric automaker's shares up 6.9%.

Apple (NASDAQ: AAPL ), meanwhile, clawed back the bulk of losses from a day earlier, when it warned on revenue on concerns that the virus would hurt iPhone demand and production. Shares closed up 1.45%.

On the earnings front, Garmin (NASDAQ: GRMN ) surged 6.7% after its fourth-quarter results topped estimates on both the top and bottom lines. Blue Apron (NYSE: APRN ) reported fourth-quarter earnings that fell well short of consensus estimates, sending its shares down about 18%.

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