Stocks End Higher as Manufacturing Data Offsets Coronavirus Fears

Stocks finish higher Monday though a sharp slump in Chinese stocks on their first day of trading since the coronavirus outbreak casts a defensive shadow over markets.
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  1. U.S. stocks ended higher Monday on positive manufacturing data that offset some fears over coronavirus and a selloff in Chinese stocks.
  2. Gilead Sciences is working with China to study the effectiveness of an experimental Ebola and SARS treatment on patients infected with the coronavirus.
  3. Exxon Mobil is Real Money's Stock of the Day. Analysts at Goldman Sachs cut their rating on the biggest U.S. oil producer to sell.

Stocks finished higher Monday as an upbeat manufacturing report helped blunt fears over the coronavirus outbreak and a sharp slump in Chinese stocks.

The Dow Jones Industrial Average finished up 144 points, or 0.51%, to 28,399, just short of a record high. The S&P 500 rose 0.73% and the Nasdaq ended up 1.34%.

Nike (NKE) - Get Report, Microsoft (MSFT) - Get Report, and IBM (IBM) - Get Report led the Dow's advance.

Boosting sentiment in the United States was an increase in the ISM manufacturing index to 50.9 in January from 47.8. It was the first time the index surpassed 50 in six months.

Tesla (TSLA) - Get Report shares soared $129.43, or 20%, to end at $780 in the second day of massive gains for the electric vehicle company on positive analyst comments and the afterglow of a strong earnings report last week. 

The Shanghai Composite plunged 7.72% on Monday, the most in four years, and erased nearly $400 billion in value.

Limiting the losses somewhat was the biggest cash injection to the financial system since 2004 from China's central bank and government efforts to curb short-selling.

The death toll in China from the coronavirus has risen to 362, while the first death outside of China was reported in the Philippines. At least 17,000 other people - including 171 people from 24 countries outside China - have been infected.

There are now 11 cases in the U.S., two of which were spread through human contact within the country, the Centers for Disease Control said Monday.

Oil prices fell to the lowest levels in more than a year on Monday as investors counted the cost to China's economy from the coronavirus outbreak.

Oil pared some of those loses, however, after a Reuters report indicated that OPEC members, along with non-member allies such as Russia, were considering a further 500,000 barrel per day increase to their 1.7 million in production cuts in order to stabilize global prices.

Exxon Mobil (XOM) - Get Report tumbled on Monday after analysts at Goldman Sachs cut their rating on the biggest U.S. oil producer to sell, citing what they called "clear downside" risks to the company's near-term targets.

Goldman analyst Neil Mehta also lowered his price target on Exxon by 18%, to $59 following the company's weaker-than-expected fourth-quarter earnings report on Friday that the analyst argued could test Exxon's ability to deliver a 15% return on capital employed by 2025. 

Apple (AAPL) - Get Report temporarily has closed its 42 stores in mainland China, one of its largest markets, as the coronavirus has spread rapidly.

"Out of an abundance of caution and based on the latest advice from leading health experts, we're closing all our corporate offices, stores and contact centers in mainland China through February 9," Apple said in a statement. "We will continue to closely monitor the situation and we look forward to reopening our stores as soon as possible."

The iPhone maker said its online store in China will remain open.

Apple makes most of its iPhones and other devices in China. The country also is Apple's third-biggest market in terms of sales behind the United States and Europe.

Gilead Sciences (GILD) - Get Report was rising sharply Monday after the drugmaker said it was working with China to study the effectiveness of an experimental Ebola and SARS treatment on patients infected with the coronavirus.

"Gilead is working with health authorities in China to establish a randomized, controlled trial to determine whether remdesivir can safely and effectively be used to treat 2019-nCoV. We are also expediting appropriate laboratory testing of remdesivir against 2019-nCoV samples," Gilead said in a statement. "While there are no antiviral data for remdesivir that show activity against 2019-nCoV at this time, available data in other coronaviruses give us hope."

Remdesivir will be tested by a medical team from Beijing-based China-Japan Friendship
Hospital for efficacy in treating the deadly new strain of coronavirus, a hospital spokeswoman told Bloomberg. Trials for the drug will be conducted in Wuhan, the central Chinese city that is ground zero for the coronavirus outbreak.

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