DAMIAN J. TROISE AP Business Writer
NEW YORK (AP) — Technology companies led U.S. stocks higher in early trading Monday as global markets mostly calmed down following a sharp sell-off last week over worries about the spreading virus outbreak in China.
China’s main stock index tumbled in its first day of trading after an extended Lunar New Year holiday break bottled up much of the pressure that had been released in other markets. The Shanghai benchmark index fell 7.7% and China’s central bank announced it was injecting $173 billion into the markets to ensure there would be enough cash.
Health authorities released updated figures of 361 deaths and more than 17,000 confirmed cases. The World Health Organization said the number of cases will keep growing because tests are pending on thousands of suspected cases. The majority of the cases and all but one death are in China.
The outbreak is threatening China’s economy as much of the nation shuts down. Many analysts have dropped their forecasts for growth in the world's second-largest economy, to near 5% from earlier forecasts of 6% for the year. With tens of millions of Chinese city dwellers ordered to mostly stay home, retailer and tourism-related businesses already are suffering.
A slump in China’s economy is already reverberating globally as companies from Apple to Starbucks warn that their operations are being hurt by the lack of business activity. Major airlines have cut flights to China amid lower demand.
The S&P 500 index climbed 1.2% as of 10:15 a.m. as investors in the U.S. regained an appetite for risk. The Dow Jones Industrial Average rose 293 points, or 1.1%, to 28,559. The Nasdaq gained 1.5% and the Russell 2000 index of smaller company stocks rose 1.2%.
Microsoft rose 1.6% and Intel gained 1.4% as technology stocks rose broadly.
Health care companies were also among the biggest gainers. Gilead Sciences was a standout, gaining 4.5%, on reports that one of its drugs is being tested as a potential treatment for the new virus.
Bond prices fell sharply, sending yields higher. The yield on the 10-year Treasury rose to 1.56% from 1.51% late Friday in another sign that investors were more confident. The rise in bond yields helped lift banks, which rely on higher yields to charge more lucrative interest rates.
Outside of mainland China, other Asian markets were mixed. European markets rose.
Investors face another busy week of corporate earnings, with 94 companies in the S&P 500 index reporting results, according to FactSet.
Google parent Alphabet will report earnings later Monday, while Ford and Disney release results on Tuesday. General Motors and Merck will report financial results on Wednesday.
Nearly half of the companies in the S&P 500 have reported financial results and the corporate America is on track for its fourth straight contraction of quarterly profits.