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Wall Street inches to records as global recovery continues

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Traders at the New York Stock Exchange in Wall Street. AFP

AFP – Further easing of investor concerns over the impact of the new Coronavirus outbreak in China allowed US stock to edge to fresh records on Tuesday, continuing a global recovery.

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And cautious comments on the fallout from the virus by US Federal Reserve Chairman Jerome Powell added to the sense of calm.

The Fed is “closely monitoring” the virus, which he said could “lead to disruptions in China that spill over to the rest of the global economy,” Powell told US lawmakers, adding that it was too soon to know how much it would affect the domestic economy.

But that assessment was less gloomy than expected.

Alan Skrainka of Cornerstone Wealth Management described Powell’s testimony as not “a newsmaking commentary and that’s why the market is relatively mixed today.”

Meanwhile, a US federal judge’s ruling that Sprint and T-Mobile can merge to create the country’s third-largest telecom sent both their share prices climbing.

The broad-based S&P 500 and the tech-rich Nasdaq both hit records, albeit just a few tenths of a percentage point over their previous peaks, while the Dow Jones Industrial Average finished flat.

The freshly-named COVID-19 virus that emerged in central China has spooked equity and oil markets for weeks as it spread to more than two dozen countries.

More than 42,000 infections have been confirmed so far in mainland China and President Xi Jinping has described the situation in Hubei, the outbreak epicentre, as “still very grave”.

“World health officials have learnt a lot from past experiences, they’ve moved relatively aggressively to contain the virus,” Skrainka said, adding that investors are emboldened by solid job and corporate profit numbers.

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