Stocks showed a notable move to the upside in early trading on Tuesday but gave back some ground over the course of the session. The major averages pulled back well off the record intraday highs set early in the session, although the Nasdaq and the S&P 500 still ended the day at new record closing highs.
While the Nasdaq edged up 10.55 points or 0.1 percent to 9,638.94 and the S&P 500 rose 5.66 points or 0.2 percent to 3,357.75, the Dow spent the latter part of the session bouncing back and forth across the unchanged before closing down 0.48 points or less than a tenth of a percent at 29,276.34.
The early upward move on Wall Street came as traders continued to shrug off concerns about the economic impact of the deadly coronavirus outbreak.
Several companies have already warned about the impact of the virus, but traders seem confident the U.S. economy is strong enough to withstand the negative effects.
Recent reports suggesting the rate of growth in coronavirus infections has slowed also generated optimism Chinese efforts to contain the outbreak are working.
Federal Reserve Chairman Jerome Powell said during testimony before the House Financial Services Committee that the central bank is closely monitoring the coronavirus outbreak but also highlighted the resilience of the U.S. economy.
In prepared remarks, Powell noted some of the uncertainties around trade have diminished following the signing of the phase one U.S.-China trade deal but cautioned risks to the outlook remain.
"In particular, we are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy," Powell said.
However, Powell pointed out that the U.S. economy has recently appeared resilient to global headwinds, with economic activity increasing at a moderate pace over the second half of last year.
Sector News
Despite the pullback by the broader markets, substantial strength remained visible among telecom stocks. Reflecting the strength in the sector, the NYSE Arca North American Telecom Index spiked by 6.5 percent to its best closing level in over a year.
Sprint (S) led the telecom sector higher, skyrocketing by 7.7 percent following news T-Mobile (TMUS) has won court approval for its $26.5 billion takeover of the telecom company.
Semiconductor stocks also turned in a strong performance on the day, resulting in a 2.1 percent jump by the Philadelphia Semiconductor Index.
Steel, brokerage and networking stocks also saw notable strength, moving higher along with most of the other major sectors.
Meanwhile, tobacco stocks bucked the uptrend, giving back ground following the rally seen in the previous session.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. China's Shanghai Composite Index rose by 0.4 percent, while Hong Kong's Hang Seng Index jumped by 1.3 percent. The Japanese markets were closed for a holiday.
The major European markets also moved to the upside on the day. While the German DAX Index surged up by 1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both climbed 7 percent.
In the bond market, treasuries gave back ground after moving notably higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.3 basis points to 1.590 percent.
Looking Ahead
Powell is scheduled to testify before the Senate Banking Committee on Wednesday, although his prepared remarks are likely to mirror today's testimony.
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