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US STOCKS-S&P 500, Nasdaq hit record highs on IBM, chip power

US STOCKS-S&P 500, Nasdaq hit record highs on IBM, chip power

The S&P 500 and Nasdaq hit record highs on Wednesday as a strong forecast from IBM added to optimism over corporate earnings, while investors assessed risks from a virus outbreak in China.

International Business Machines Corp shares jumped 3.4% after it forecast full-year profit above market expectations on strength in its high-margin cloud computing business. Technology stocks, which have played a big role in Wall Street's recent record run, rose 0.9%, with chip stocks gaining after a strong forecast from Dutch semiconductor equipment maker ASML Holding NV.

The Philadelphia Semiconductor index rose 1.4%. Meanwhile, China stepped up measures to curb the outbreak of a new flu-like virus that has killed 17 and infected 540 in the country, reassuring investors worried about its fallout.

Travel and airline stocks recovered moderately from sharp losses in the previous session as the outbreak revived fears of a pandemic similar to the Severe Acute Respiratory Syndrome (SARS) in 2003 and came ahead of the Chinese Lunar New Year when millions of people travel. The NYSE Arca airlines index rose 1% after dropping 2.6% on Tuesday.

"Certainly, the market is spooked by it," said Phil Blancato, chief executive officer of Ladenburg Thalmann Asset Management in New York. "But when markets are overvalued - like they are right now, any small hint of concern will send the market into a volatile moment."

Netflix Inc fell 3.1% after the streaming video pioneer beat estimates for quarterly subscription growth, but warned of a tough first quarter. At 1:23 p.m. ET, the Dow Jones Industrial Average rose 0.16% to 29,243.34.

The S&P 500 gained 0.31% to 3,331.00 and the Nasdaq Composite was up 0.58% at 9,425.19. Among other weak spots was Johnson & Johnson, dropping 0.6% after the healthcare conglomerate forecast full-year profit largely below expectations.

The Dow came under pressure as Boeing Co extended losses after announcing further delay in the return of its 737 MAX jets to service. Advancing issues outnumbered decliners by a 1.33-to-1 ratio on the NYSE and a 1.25-to-1 ratio on the Nasdaq.

The S&P index recorded 106 new 52-week highs and two new lows, while the Nasdaq recorded 152 new highs and 23 new lows.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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