NEW YORK — U.S. stocks shook off their latest virus-induced loss and returned to record heights Wednesday, with several familiar faces doing the heaviest lifting.
Technology stocks helped lead the market higher, as they’ve been doing for years, and Apple rallied to recover most of its loss from the prior day. It dropped Tuesday after warning that revenue this quarter would fall short of forecasts due to the viral outbreak centered in China.
Worries remain about how disruptive the virus will be for manufacturing, travel and other economic activity across the region, but markets around the world rose as the number of new virus cases in China fell Wednesday. Expectations are also high that China and other central banks around the world will limit the economic damage through injections of cash into markets, lower interest rates and other stimulus measures, said Shawn Cruz, manager of trader strategy at TD Ameritrade.
The S&P 500 rose 15.86 points, or 0.5%, to 3,386.15 and surpassed its record set last week. The Dow Jones Industrial Average gained 115.84, or 0.4%, to 29,348.03. The Nasdaq climbed 84.44, or 0.9%, to 9,817.18 and also set a record.
“I think markets are a little too rosy now,” Cruz said. “There is this assumption that the actual impact won’t be much, and if there is one, central banks will be able to step in and keep us alive.”
The problem arises if the virus lasts longer and does more damage than markets seem to be anticipating. “It seems like everyone is on the same side of the trade that this is going to be fine, which raises the potential for everyone to run for the door at the same time if central bank injections of cash aren’t going to cure anybody,” Cruz said.
Raising the potential volatility even more in such a scenario, Cruz said the companies most at risk to slowdowns in China are also those that have grown to become some of the biggest components of the S&P 500. That gives their movements outsized effects on index funds.