Stocks opened lower, but quickly pared losses Tuesday as positive political commentary and analyst actions diluted early concerns over a virus outbreak in China. China-based stocks, as well as U.S. stocks with China exposure and some travel-related issues remained under early pressure. But Intel (INTC) jumped in early trade, leading the Dow industrials. Tesla (TSLA) spiked to the top of the Nasdaq 100. After the close, FANG giant Netflix (NFLX) delivers its quarterly results, and IBM (IBM) wraps things up for the Dow Jones today with its afterhours report.
XThe Nasdaq and S&P 500 each opened down 0.3% on the stock market today, but the Nasdaq pared back to a 0.1% loss, while the S&P 500 traded down 0.2% a half hour into the session. The Dow Jones industrials sagged 0.2% lower, bolstered by Intel's 1.8% gain, as stocks moved into the holiday-shortened week.
A still unidentified virus which has killed six and infected hundreds in China is forcing city quarantines and affecting travel routes to Japan, Thailand and South Korea. On the U.S. market, investors across the board sought shelter from any sort of exposure to the potential financial impact of the unfolding situation. Among China-based stocks, hotel operator Huazhu Group (HTHT) slammed 11% lower, Yum China Holdings (YUMC) tanked more than 5%.
For-profit school chains TAL Education (TAL) and New Oriental Education & Technology (EDU) fell 9% and 2%, respectively. TAL reported mixed fiscal third-quarter results early Tuesday. New Oriental's results, reported Monday, topped analyst expectations.
The worst losses on the Nasdaq were from Trip.com Group (TCOM), down almost 12%, and Macau casino owner Wynn Resorts (WYNN), which sank 6%.
Wynn Resorts, Las Vegas Sands (LVS) fell hardest among S&P 500 stocks, down 5.6%. Cruise-line operator Carnival (CCL) showed a 1.3% decline.
Gear up for a busy week of stock market action by reading IBD's Investing Action Plan.
Advancers: Tesla Gets Big Price Target Hike, Evergy Eyes Buy Point
Among the stocks posting early gains, Telsa topped the Nasdaq 100, up 5.3%, as it aimed to snap a three-day decline. New Street hoisted the stock's price target more than 50%, to 800.
Halliburton managed a 0.9% after reporting fourth-quarter earnings slipped less than expected. Logitech powered up 3%, also on earnings. IBD 50 stock XP (XP) jumped nearly 3% in early trade, toward a buy point.
Electrical utility Evergy (EVRG) surged 2%, trading near the top of the S&P 500. Activist hedge fund manager Elliott Management reported an 11.3 million-share stake in the company, and sent a letter to mangement detailing a strategy the fund believes could unlock $5 billion in value for investors. Evergy shares are up 43% over the last 11 months, and currently poised below a 67.91 buy point in a 16-week cup base.
Dow Jones Today: Intel Leads, Dow Lags
Intel soared to the top of the Dow Jones industrials in early trade, chemicals maker Dow (DOW) fell 1.4%, to the bottom of the list. Intel traded 2.2% higher after Jeffreis upgraded the stock to hold and boosted its price target 50% to 64 — about 5% above where shares traded on Tuesday. The note pointed to expectations that the company would will divest its memory business and trim operating expenses, and that several factors point to "dramatic change" over the next two years.
Intel stock is pulled back to test its 10-week moving average, while still well within the buy range of what IBD MarketSmith chart analysis plots as a 59.23 buy point on a 35.week cup-with-handle base. Intel reports results on Thursday.
China Markets Dive; Europe Pares Losses
Global markets reacted to China's sell-off, as authorities sought to impose a quarantine around the 11 million residents in the city of Wuhan. An unidentified pneumonialike coronavirus first detected Dec. 31 had spread to 298 people by late Tuesday. The majority of cases had occurred in Wuhan, with 54 cases being monitored in other provinces.
The virus is of particular concern just ahead of the country's week-long Lunar New Year celebration, set to begin on Friday. China's Ministry of Transport estimates that 400 million people will be on the move during the celebration , making a total of 3 billion trips during this period, according to the Washington Post.
China's markets were also apparently hurt by a Moody's credit rating downgrade for the city of Hong Kong, valuing in the impact of more than six months of pro-democracy protests. Hong Kong's Hang Seng Index dived 2.8% Tuesday. The Shanghai Composite tumbled 1.4%.
Europe's market remained lower, but trimmed losses in afternoon trade. London's FTSE 100 narrowed its loss to 0.7%, while the CAC-40 in Paris pared back to a 0.7% decline and Frankfurt's DAX improved to trade less than 0.1% in the red.
For more detailed analysis of the current stock market and its status, study the Big Picture.
IPO Watch: XP Poised For Breakout
IPOs showed mixed action early Tuesday. China-based names Punduoduo (PDD) dropped 2% and Qudfian (QD) dived 5.7%. But lab meat innovator Beyond Meat (BYND) hammered out an early 8% gain. December IPO XP popped 3%, moving to less than 2% below a 40.60 buy point in an IPO base.
Dow Jones Today: Merck, Intel In Buy Ranges With Earnings Due
On the Dow Jones today, IBM launches a big two weeks for Dow earnings reports. After IBM, Johnson & Johnson (JNJ) reports on Wednesday. Intel (INTC), Merck (MRK), Procter & Gamble (PG) and Travelers (TRV) all have reports scheduled for Thursday. American Express (AXP) delivers its results on Friday.
Intel, Procter & Gamble and American Express are in buy ranges. Merck stock is in a buy range on a rebound from 10-week support.
Find Alan R. Elliott on Twitter @IBD_Aelliott
YOU MAY ALSO LIKE:
After Hours: These 3 Tech Giants Are Moving Higher
Semiconductor Stocks Lead The Charge As Industry Cycle Turns Up
Want To Get Quick Profits And Avoid Big Losses? Try SwingTrader
Best Growth Stocks To Buy And Watch
IBD Digital: Unlock IBD's Premium Stock Lists, Tools And Analysis Today
