Yahoo Finance Stocks - Wall Street Hits New Record Highs as Virus Fears Ebb
By Geoffrey Smith
Investing.com -- U.S. stock markets advanced to new record highs on Wednesday as fears about the potential impact of the coronavirus outbreak eased, while tumbling energy costs promised greater spending power for consumers and wider profit margins for businesses.
By 10:25 AM ET, the Dow Jones Industrial Average had risen 111 points or 0.4%, while the S&P 500 was up 11 points or 0.5% and the Nasdaq Composite was up 61 points or 0.7%.
Tesla (NASDAQ:TSLA) led a broad advance, breaking through the $100 billion valuation milestone for the first time as a squeeze on the many hedge funds that have shorted it over recent months and years became increasingly painful. CEO and founder Elon Musk will be eligible for up to $346 million in stock awards, although one imagines the satisfaction of thwarting the doomsters who have been his chief bugbear for the last four or five years will count for more for him.
Wedbush became the latest house to raise its price target on Wednesday, hoisting it to $550 from $370. That's the latest in a series of analyst upgrades that have followed the commissioning of Tesla's new plant in China, the world's largest market for electric vehicles.
IBM (NYSE:IBM) also rose 4.1% to its highest since October after finally breaking a sequence of 20 straight year-on-year declines in quarterly earnings. The acquisition of Red Hat last year has helped it accelerate its repositioning as a Cloud-based service provider.
At the other end of the performance scale, Netflix (NASDAQ:NFLX) fell 3.6% and was on course to wipe out all its gains for the year to date after market participants chose to focus on the downbeat part of a mixed earnings update which suggested increasingly tough competition in the streaming space.
Boeing (NYSE:BA), meanwhile, fell another 0.3% but didn’t threaten the new 13-month low that it posted Tuesday after pushing back yet again the timeline for getting its 737 MAX aircraft back in the air. The company said it now expects U.S. regulators to declare the plane airworthy in the middle of the year, raising the risk that airlines will have to go another summer without enough capacity to meet demand.
Oil and gas stocks came under pressure after U.S. crude prices tumbled on a report by Goldman Sachs (NYSE:GS) saying that the coronavirus outbreak, which has now claimed nine lives, could cut global oil demand by 260,000 barrels a day – at a time when the market is already expected to be oversupplied for at least the first half of the year.
Exxon Mobil (NYSE:XOM) stock fell 0.3% to its lowest since October, while shale players Devon Energy (NYSE:DVN) and Whiting Petroleum fell 2.0% and 4.5% respectively.
Gold futures continued to drift in a narrow range around $1,550 an ounce, while the dollar index, which measures the greenback against a basket of developed-market currencies, rose 0.1% to 97.385.
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