By Yasin Ebrahim
Investing.com – The S&P and Nasdaq rallied to record highs on Wednesday as reports of a slight decline in Covid-19 cases and hopes for additional stimulus from China prompted investors to resume their bullish bets on stocks.
The S&P 500 rose 0.62%, the Nasdaq Composite surged 1.01% and the Dow Jones Industrial Average rose 0.53%.
China reported 1,749 confirmed new cases of Covid-19 on Wednesday, the lowest number of newly-confirmed cases since Jan. 29, stoking investor optimism that the spread of the virus was slowing.
Also adding to the positive backdrop on Wall Street, Bloomberg reported that Beijing was considering cash injections or mergers to bail out airlines hit by the virus.
Tech powered the broader rally in stocks, led by a 1.7% rise in Apple (NASDAQ:AAPL) as easing virus jitters gave credence to bullish calls from analysts, many of whom had downplayed the tech giant's warning that it will miss second-quarter revenue guidance.
Chip stocks also welcomed a wave of buying, with Nvidia leading the charge higher following a bullish note on the chipmaker from Wall Street.
Bernstein upgraded its rating on Nvidia (NASDAQ:NVDA) to outperform from market perform and hiked its price target on the company to $360 per share from $300 per share, sending its shares to an all-time high, up 5%.
The return of risk appetite triggered selling in U.S. government bonds, sending prices lower and yields higher, pushing bank stocks higher.
JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) rose more than 1% as a rise in bond yields tends to boost net interest margin – the difference between the interest income generated by banks and the amount of interest paid out to their lenders.
With investor hopes growing that efforts to control the virus are gathering pace, oil prices found their footing, triggering a rebound in energy stocks following a selloff a day earlier.
On the earnings front, investors had to contend with mixed quarterly results.
Garmin (NASDAQ:GRMN) surged 8% after its fourth-quarter results topped estimates on both the top and bottom lines.
Blue Apron (NYSE:APRN) reported fourth-quarter earnings that fell well short of consensus estimates, sending its shares down more than 19%.
Elsewhere, Tesla (NASDAQ:TSLA) continued its run higher, up 7% after Piper Sandler raised its price target on the stock to $928 from $729 on optimism over the electric automaker's move into battery and solar power products.