Stocks rally as traders shrug off the spread of a deadly virus from China to the US

Brendan McDermid/Reuters

• Stocks rallied on Wednesday as investors shrugged off the spread of the deadly coronavirus from China.
• The first confirmed US case of the SARS-like disease was diagnosed, heightening fears of an outbreak.
• "There isn't any case reported in Europe yet but it is only a matter of a time," one analyst said.
• Germany's DAX index touched a record high amid "evidence that an industrial rebound is just around the corner," another analyst said.
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Global stock markets recovered on Wednesday as investors shrugged off the spread of a deadly virus from China to the US.

Federal health officials diagnosed a man in Washington state with the coronavirus, marking the first confirmed case in the US of the SARS-like disease, which has sickened more than 300 people and killed at least six. The virus is likely to spread farther during holiday celebrations this weekend.

"There isn't any case reported in Europe yet but it is only a matter of a time," Naeem Aslam, chief market analyst at AvaTrade, said in a morning note. "The virus is airborne and millions of people travel for the Chinese Lunar New Year holidays."

Markets are proving resilient, but some analysts still sounded the alarm on Chinese stocks.

"We would argue the risk of an economy-crippling pandemic is a good enough reason to sell out," Jasper Lawler, head of research at London Capital Group, said in a morning note.

"Travel and leisure companies, including Macau casino operators listed in Hong Kong, have been hit hardest and still look most at risk if wider markets start to seriously roll over."

More positively, Germany's benchmark DAX index touched a record high thanks to "rising evidence that an industrial rebound is just around the corner," Lawler said. German industrial production rose 0.9% month-on-month in November, according to Eurostat data published last week.

Here's the market roundup as of 10:30 a.m. in London (5:30 a.m. in New York):

• Asian markets rallied with China's Shanghai Composite up 0.3%, Hong Kong's Hang Seng up 1.3%, and Japan's Nikkei up 0.7%.
• European equities are mixed with Germany's DAX up 0.1%, Britain's FTSE 100 up 0.2%, and the Euro Stoxx 50 down 0.1%.
• US stocks are poised for a positive open with futures underlying the Dow Jones Industrial Average and S&P 500 up about 0.3%, and Nasdaq futures up 0.7%.
• Oil prices dropped with West Texas Intermediate crude down 0.7% at about $58, and Brent crude down 0.7% at $64.20.

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