Wall Street edges higher a day after sharp sell-off

NEW YORK (Reuters) – U.S. stock indexes ticked slightly higher on Tuesday as investors dipped their toes in the water a day after worries about the worldwide spread of the coronavirus sent the S&P 500 and the Dow Industrials to their biggest daily declines in two years.

Investors have been laser focused on the potential economic impact of the virus outbreak.

On Tuesday Iran’s death toll rose to 16, the highest outside China, while dozens of countries from South Korea to Italy accelerated emergency measures. [nL3N2AP0BC]

“Today is just a bounce back after yesterday’s very dramatic sell off,” said Kenny Polcari, senior market strategist at SlateStone Wealth LLC in Jupiter, Florida, adding that long term investors were likely bargain hunting.

But the strategist cautioned: “I don’t think the virus story is over yet. When it hits the United States there’s going to be another round of selling.”

U.S. stock indexes declined sharply in the past three sessions with fears of a pandemic knocking off more than 3% on Monday after a flare up in infections in several countries. As of Monday’s close, the S&P 500 and the Dow Jones Industrials had erased their gains for the year.

Last week, positive fourth-quarter earnings and hopes of limited damage from the virus outbreak had pushed Wall Street to record highs.

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At 9:59 a.m. ET (1459 GMT), the Dow Jones Industrial Average rose 78.56 points, or 0.28%, to 28,039.36, the S&P 500 gained 7.73 points, or 0.24%, to 3,233.62 and the Nasdaq Composite added 39.19 points, or 0.42%, to 9,260.47.

Of the S&P’s 11 industry sectors, communications services and technology were the biggest gainers, each rising about 0.5%. Energy was the biggest laggard as oil prices dipped.

Shares of Dow-member Home Depot Inc rose 1.8% after the home improvement chain beat quarterly sales and profit estimates providing one of the biggest boosts to the S&P 500. [nL5N2AP3WS]

Department store operator Macy’s Inc also fell 1% even after a smaller-than-expected drop in quarterly same-store sales. [nL1N2AP03H]

HP Inc gained 5% after the company said it would step up efforts to slash costs and buy back stock, as it seeks investor support to defend against a $35 billion takeover offer from U.S. printer maker Xerox Holdings Corp.

Among other stocks, Perrigo rose 5% after the drugmaker gained the first U.S. approval for a generic version of Teva Pharmaceutical Industries Ltd’s respiratory drug, ProAir.

Mastercard Inc shares fell 1% after announcing Chief Executive Officer Ajay Banga would step down at the start of the next year and be replaced by products head Michael Miebach.

Declining issues outnumbered advancing ones on the NYSE by a 1.21-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored decliners.

The S&P 500 posted 2 new 52-week highs and 15 new lows; the Nasdaq Composite recorded 17 new highs and 43 new lows.

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