U.S. Stocks Set for Weekly Gains
By Avantika Chilkoti and Gunjan Banerji
U.S. stocks paused Friday but were on track to end the week with gains as investors' concerns about a sharp rise in coronavirus cases from earlier in the week faded.
The S&P 500 and Nasdaq Composite were little changed in recent trading. The Dow Jones Industrial Average fell 95 points, or 0.3%. All three indexes were on track to cap off the week with gains.
Investors grew concerned this week about when the coronavirus outbreak might peak after Chinese authorities changed the criteria for diagnosis, leading to a dramatic increase in the number of new cases. But stocks in the U.S. and in Europe largely continued rallying on faith that central banks and governments will take steps to shield the global economy from the impact of the outbreak.
"The market wants to believe this is a one-quarter blip and we're back to the races," said Neil Dwane, global strategist at Allianz Global Investors.
Additionally, earnings have continued to largely beat investors expectations, helping give stocks a boost.
Shares of some individual companies recorded bigger moves. Nvidia advanced 7% after the graphics-chip maker's fourth-quarter earnings topped Wall Street's expectations. Nvidia's gains helped the S&P 500's information technology sector outperform the broader market, rising 0.2%.
Expedia Group gained more than 11% after the online travel company projected cost savings and growth in a measure of profit for this year.
Some investors said they remained optimistic about the trajectory for U.S. stocks this year, despite nagging concerns about the virus.
"As the year progresses, we're in a pretty strong place to continue to surprise on the upside," said Wayne Wicker, chief investment officer at Vantagepoint Investment Advisers. "These types of issues--while tragic--in and of themselves are short lived."
Still, some of the jitters that were on display earlier in the week were more apparent in the market for government bonds.
The yield on the 10-year Treasury note fell to 1.587%, according to Tradeweb, from 1.616% Thursday as fresh data released Friday showed that U.S. retail sales increased 0.3% in January from the month prior, in line with expectations. Though the report showed that spending is on steady footing, spending was uneven across the board. Clothing and gasoline sales dropped while U.S. auto sales increased.
There were signs of fresh tensions between Washington and Beijing that emerged overnight after the U.S. charged Chinese telecommunications giant Huawei and two of its U.S. units with racketeering conspiracy and conspiracy to steal trade secrets. Tensions between the two nations had roiled markets for large parts of last year, and eased only briefly after they sealed an initial trade accord that failed to address a number of crucial issues.
"We always thought the 'phase one' trade deal would not actually resolve tensions between the U.S. and China," said Simona Gambarini, markets economist at Capital Economics in London. "The two economies are based on totally different foundations."
Overseas, the Stoxx Europe 600 index slipped 0.1% and the Shanghai Composite Index closed 0.4% higher.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com and Gunjan Banerji at Gunjan.Banerji@wsj.com