By Geoffrey Smith
Investing.com -- Wall Street raced to new all-time highs at the opening on Wednesday, driven by growing hopes that the coronavirus, now known as Covid-19, could soon peak.
However, China changed its methodology for counting new cases last week, and no longer includes those patients who test positive without showing symptoms. Given that the virus’ incubation period can last up to 24 days – also according to official Chinese data – that creates a clear risk of under-reporting. The economic impacts of the virus continue to become more visible, with big downward revisions to global oil demand and the increasing use of force majeure clauses by Chinese companies to get out of contractual obligations to buy inputs or deliver finished products.
By 10:05 AM ET (1505 GMT), the Dow Jones Industrial Average had risen 199 points, or 0.7%, while the S&P 500 had risen 0.4%. Both touched new record highs in the opening minutes of trading after China’s authorities published figures showing a sharp fall in new cases of Covid-19 for the second day in a row. The Nasdaq Composite was up 0.3%.
Buying was again concentrated in mega-cap stock such as Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN), despite a lack of newsflow out of either company.
Among those companies that did generate news on Wednesday, Shopify (NYSE:SHOP) rose 13.8% to a new all-time high after blowout numbers for its fourth quarter, and Molson Coors (NYSE:TAP) rose 5.1%, also helped by solid results (although nowhere near as solid as Heineken's (OTC:HEINY): the Dutch brewer’s ADRs rose 5.9% after its quarterly report.
Elsewhere, the shorts betting against Bed Bath & Beyond's (NASDAQ:BBBY) turnaround were vindicated after the company’s same-store sales fell short of expectations in December and January. CEO Mark Tritton blamed product availability and weaker-than-expected store visits. BB&B stock fell 25%, reversing all the gains since October.
CVS Health (NYSE:CVS) stock ground out another 1.2% increase after reporting above-forecast earnings for the fourth quarter, which were again supported by the contribution of Aetna, the insurer that it bought late in 2018.
Elsewhere, oil and gas stocks were lifted by a 2.9% rebound in U.S. crude futures, after the Organization of Petroleum Exporting Countries cut its estimate for world oil demand this year by ‘only’ 230,000 barrels a day. The U.S. government had on Tuesday estimated demand destruction of 300,000 bpd. Exxon Mobil (NYSE:XOM) rose 1.4%, while Chevron (NYSE:CVX) rose 0.9% and Devon Energy (NYSE:DVN) rose 4.3%.
The dollar index, which tracks the greenback against a basket of six developed-market currencies, found a bid again, rising 0.1% to 98.72 as the euro struggled to defend the $1.0900 level.