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Saturday August 8th, 2020 2:29PM

Asian shares rise despite worries about virus outbreak

By The Associated Press
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TOKYO (AP) — Asian shares were higher Wednesday, although the outbreak of a new virus in the region continued to weigh on investor sentiments.

Japan's Nikkei 225 rose 0.5% in morning trading to 23,813.14. Australia's S&P/ASX 200 gained 0.6% to 7,094.00. Hong Kong's Hang Seng added 0.7% to 27,771.29, while the Shanghai Composite inched up 0.1% to 2,905.58.

“Despite coronavirus concerns, investors tend to believe that central banks and policymakers have measures to stimulate the economy during and post the public health crisis,” said CMC Markets in a report.

China reported 97 more deaths from the new disease, named COVID-19, pushing the total dead past 1,100, even as the country remained largely closed down to prevent its spread. The number of cases worldwide is about 45,000, all but a few hundred in China.

Investor sentiments in Asia were also cheered somewhat by Wall Street, where modest gains overnight nudged the S&P 500 and Nasdaq to all-time highs for the second straight day. The Dow Jones Industrial Average finished essentially flat.

Investors weighed another batch of mostly solid company earnings reports. Sprint soared after a federal judge cleared a major obstacle to the company being acquired by T-Mobile. Cruise operators, hotels and other companies that focus on travel made solid gains, the latest sign that traders are feeling less worried about the economic impact from the virus outbreak.

“Stocks are collectively saying, ‘Hey, maybe we can work past some of the noise with the virus; maybe the fallout won’t be as big as we thought," said Willie Delwiche, investment strategist at Baird. “And the U.S. economy, so far at least, looks like it's weathering it pretty well.”

The S&P 500 index rose 5.66 points, or 0.2%, to 3,357.75. The Dow Jones Industrial Average slipped 0.48 points, or less than 0.1%, to 29,276.34. It had been up 0.5%.

The Nasdaq composite gained 10.55 points, or 0.1%, to 9,638.94. The Russell 2000 index of smaller company stocks picked up 9.85 points, or 0.6%, to 1,677.51.

After a downbeat January, U.S. stocks have been mostly notching gains this month as traders brush off fears about the virus outbreak and its impact on businesses and the global economy. Beijing has promised to take measures to soften the blow to China’s economy and investors are hopeful that other governments will do the same if necessary.

Travel-related stocks, which have been hammered by traders in recent weeks, notched gains Tuesday. Hilton Worldwide rose 1.4%, Carnival climbed 2.8% and American Airlines gained 3.6%.

Wall Street got some encouragement Tuesday from Federal Reserve Chairman Jerome Powell. In his semiannual monetary report to Congress, Powell said it was too early to assess the threat the virus poses to the U.S. economy, but he noted that the economy “is in a very good place” with strong job creation and moderate growth.

Traders welcomed a federal judge’s decision to reject claims by a group of states arguing T-Mobile’s proposed $26.5 billion buyout of rival Sprint would mean less competition and higher phone bills. Shares in Sprint surged 77.5%, while T-Mobile jumped 11.8%.

Meanwhile, the Federal Trade Commission said Tuesday it has ordered Facebook, Amazon, Apple, Microsoft and Google's parent Alphabet to turn over detailed information on their acquisitions going back to 2010 as part of an investigation into the five giant tech companies' market dominance.

The FTC, the Justice Department and a House committee have been investigating the conduct of big tech companies and whether they aggressively bought potential rivals to suppress competition. Some critics have pointed to Facebook's acquisition of Instagram and WhatsApp, for example, as deals that should be questioned.

Microsoft slid 2.3%, Facebook fell 2.8% and Apple dropped 0.6%. Amazon rose 0.8%, while Alphabet inched up 0.1%.

Investors also assessed the latest batch of company earnings reports Tuesday.

AutoNation climbed 6.3% after the car dealership’s latest quarterly results topped Wall Street’s forecasts, aided by higher demand for used cars.

Cloud-based phone system provider RingCentral also posted surprisingly good earnings and issued a solid forecast. The stock rose 6.8%.

Strong fourth-quarter results also gave shares in Brighthouse Financial a boost. Shares in the annuity and life insurance company, which announced a $500 million share buyback program, jumped 10.7%.

Results from other companies failed to impress traders.

Goodyear Tire & Rubber slumped 12.4% after the tire maker's fourth-quarter earnings and revenue fell short of Wall Street forecasts.

Under Armour plunged 18.9% after the athletic gear company said it may need to restructure this year, which may involve scuttling the opening of its New York City flagship store. The company also gave investors a weak profit forecast for the year and said the virus outbreak in China will drag first-quarter sales down by $50 million to $60 million.

ENERGY:

Benchmark crude oil added 60 cents to $50.54 a barrel. It rose 37 cents to settle at $49.94 a barrel. Brent crude oil, the international standard, gained 92 cents to close at $54.93 a barrel.

CURRENCIES:

The dollar rose slightly to 109.89 Japanese yen from 109.85 yen on Tuesday. The euro strengthened to $1.0918 from $1.0914.

___

AP Business Writers Alex Veiga and Damian J. Troise contributed to this report.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Financial Services
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