US STOCKS-Wall Street rallies as China measures ease virus fears

U.S. stocks surged on Tuesday and the S&P 500 and Nasdaq were on pace to unwind losses from last week as fears of a heavy economic impact from the coronavirus epidemic tapered off after China's central bank intervened for the second day. China injected 1.7 trillion yuan ($242.74 billion) via reverse repos on Monday and Tuesday, helping Chinese stocks reverse some losses and lifting the world equity index.

The stimulus boosted investor sentiment even as several economists cut forecasts for 2020 global growth as the fast-spreading virus hampers business operations in the world's second-largest economy. "If China is doing what it needs to contain the worst-case scenario from a financial perspective, then maybe the weakness we saw last week was a little overdone," said Willie Delwiche, investment strategist at Baird.

The S&P 500 has so far recouped a 2% loss from last week, which was its the steepest weekly drop in six months. The Nasdaq was just shy of a record high. Technology stocks, which are typically sensitive to growth-related concerns in China, led the charge with their 2.5% gain. The China-focused Philadelphia SE semiconductor index climbed 2.8%.

Alphabet Inc dropped 3.3% after Google's advertising business and new data about YouTube and Google Cloud broadly disappointed. At 11:29 a.m. ET the Dow Jones Industrial Average was up 484.06 points, or 1.70%, at 28,883.87, the S&P 500 was up 53.26 points, or 1.64%, at 3,302.18 and the Nasdaq Composite was up 170.28 points, or 1.84%, at 9,443.68.

Adding to the optimism was data that showed new orders for U.S.-made goods rose by the most in nearly 1-1/2 years in December. It comes a day after a surprise rebound in factory activity in January. The fourth-quarter earnings season is half done and nearly 70% of companies that have reported so far have surpassed earnings estimates.

Ralph Lauren Corp jumped 9.1% after the retailer's holiday-quarter profit beat market expectations. Health insurer Centene Corp slipped about 1.5%, weighed down by a surge in quarterly medical costs.

Investors were also keeping an eye on the U.S. Democratic presidential nominating race, where officials blamed "inconsistencies" for an indefinite delay in Iowa's caucus results. Advancing issues outnumbered decliners by a 3.18-to-1 ratio on the NYSE and by a 2.94-to-1 ratio on the Nasdaq.

The S&P index recorded 58 new 52-week highs and two new lows, while the Nasdaq recorded 99 new highs and 30 new lows.