Stocks - Wall Street Opens Mixed on China Stimulus, Virus Spread
By Geoffrey Smith
Investing.com -- Wall Street opened in a cautious mood on Thursday as optimism over containment of the Covid-19 virus in China was offset by signs of it spreading elsewhere in Asia, notably in South Korea, where the number of recorded cases doubled overnight.
By 10:20 AM ET (1520 GMT), the Dow Jones Industrial Average was up 2 points, effectively flat, as was the S&P 500. The Nasdaq 100 was down 0.1%.
Among the biggest movers was online brokerage E-Trade (NASDAQ:ETFC), which rose 24.2% after the company agreed to be bought by Morgan Stanley (NYSE:MS).
Morgan Stanley stock was down 4.1%, as market participants looked askance at the $13 billion price tag, thinking that the rapid consolidation of the retail brokerage sector ought to have strengthened its bargaining hand.
There were further extreme gains for Virgin Galactic (NYSE:SPCE) and hydrogen fuel cell maker Plug Power (NASDAQ:PLUG), as the flood of retail investors into both stocks continued to outweigh short positioning. Reuters reported on Wednesday that nearly one-third of Virgin Galactic’s free float was now shorted, but it still managed another 5.7% gain in early trading. Plug Power added another 2.6%.
Joining the party was online marketplace Fiverr (NYSE:FVRR), which rose 11% to its highest since last June’s rocky float. JPMorgan (NYSE:JPM) analysts upgraded the stock earlier to overweight with a target price of $37, according to wire reports. That implies another 11% upside potential even after the morning’s move.
Newmont Goldcorp (NYSE:NEM) rose 4.9% to an eight-year high after the company raised its dividend by 79%, offering further cost cuts and disposals to free up cash even as the price of the gold it mines hits a seven-year high.
Elsewhere, oil and gas stocks drew little comfort from the bounce in U.S. crude prices, with Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and ConocoPhillips (NYSE:COP) all edging down. By contrast Williams (NYSE:WMB) rose 4.6% to its highest in four weeks after posting stronger-than-expected revenue in the fourth quarter.
Tesla (NASDAQ:TSLA) stock meanwhile pulled back 1% after extraordinary gains in recent sessions. A report that China may extend subsidies for electric vehicles beyond this year went largely overlooked.
In other markets, the dollar index, which tracks the greenback against a basket of currencies, came off an earlier high of 99.817 that was its highest in nearly three years. By 10:20 AM ET, it was at 99.60, unchanged on the day.
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