Stocks extend their rally, lifting the S&P 500 and Nasdaq to all-time highs

Healthcare and financial stocks led another record-setting rally on Wall Street on Wednesday, extending the market’s gains for the week.

The Dow Jones industrial average climbed more than 480 points, and the Standard & Poor’s 500 index and Nasdaq composite each hit an all-time high.

A batch of solid corporate earnings reports and encouraging economic data overshadowed concerns Wednesday about the potential economic fallout from the coronavirus outbreak that originated in China.

Payroll processor ADP’s latest jobs survey indicated that hiring last month accelerated more than expected. A separate report showed economic activity increased in January.

“The earnings numbers that we’ve gotten for the most part have been pretty solid, and the ADP report was a blowout on the good side,” said Scott Ladner, chief investment officer for Horizon Investments.

The S&P 500 climbed 37.10 points, or 1.1%, to 3,334.69. The Dow climbed 483.22 points, or 1.7%, to 29,290.85. The tech-heavy Nasdaq — which also notched a record high Tuesday — rose 40.71 points, or 0.4%, to 9,508.68.

The Russell 2000 index of smaller-company stocks climbed 25.15 points, or 1.5%, to 1,681.92.

Industrial and technology stocks also helped lift the market. Crude oil prices jumped 2.3%, giving energy stocks a boost. Exxon Mobil shares gained 4.6%.

The real estate sector was the only decliner as investors shifted away from traditionally safe holdings and took on more risk. The yield on the 10-year Treasury rose to 1.64% from 1.60%.

The recent coronavirus outbreak has infected more than 24,500 people globally but has been mostly confined to China. The world’s second-largest country remains on lockdown and companies continue to warn of an expected drag on revenue and profit, though the extent of the damage remains unclear.

Tesla plunged 17.2% on reports that the shutdowns in China will delay production at the electric-car maker’s Shanghai factory. The company warned investors last week that production delays in China were possible.

Anxiety about the outbreak fueled a mid-January slump for U.S. stocks, but investors appear to have set aside those jitters to start this month.

“We’re not only focused on what’s going on with this virus, [but] we’re [also] focused on all the other things that are out there, and all the other things that are out there are systematically and consistently positive,” Ladner said.

Wednesday’s encouraging news about the U.S. economy included ADP’s report that private U.S. companies added 291,000 jobs in January, a big increase from December. The report came out ahead of the Labor Department’s release of its January jobs tally, due out Friday. Many analysts expect that report will show a job gain of 150,000, up from 145,000 in the government’s report in December.

Meanwhile, the Institute for Supply Management said its index of business activity by service sector companies increased in January, an indicator of continued steady expansion of the economy.

Traders also continued to weigh a mixed batch of company earnings reports.

Shares of Versace parent Capri Holdings jumped 8.3% and CoverGirl owner Coty vaulted 14.5%, notching some of the day’s strongest gains after posting quarterly results that easily beat analysts’ forecasts.

Humana climbed 6.4% after the health insurer reported surprisingly good fourth-quarter profit and revenue.

Merck fell 2.9% after the drugmaker reported weak fourth-quarter revenue and said it would spin off some of its operations, including its women’s health division.

Ford slumped 9.5% after the automaker capped a disappointing year by posting weak fourth-quarter earnings and giving a weak profit forecast for 2020. The company’s profit plunged in 2019 because of slowing sales, the cost of a botched SUV launch and some big pension expenses.

So far, about 53% of S&P 500 companies have reported their results for the October-through-December quarter. Of those companies, nearly 70% have issued results that beat analysts’ forecasts for profits, according to S&P Global Market Intelligence.

Macy’s shares rose 6% after the department store giant said it would cut 2,000 jobs and close 125 of its least productive stores. The store closures represent about one-fifth of Macy’s current total.

Benchmark crude oil rose $1.14 to settle at $50.75 a barrel. Brent crude oil, the international standard, gained $1.32 to close at $55.28 a barrel. Wholesale gasoline rose 5 cents to $1.49 a gallon. Heating oil climbed 7 cents to $1.65 per gallon. Natural gas fell 1 cent to $1.86 per 1,000 cubic feet.

Gold rose $7.40 to $1,557.80 an ounce. Silver rose 4 cents to $17.57 an ounce. Copper rose 3 cents to $2.58 a pound.