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* Cisco drops after lackluster forecast
* Kraft Heinz falls on $666 mln charge, sales miss
* New coronavirus cases in China jump under new method
* Indexes: Dow down 0.25%, S&P and Nasdaq flat
(Updates to early afternoon)
By Medha Singh
Feb 13 (Reuters) - Gains in defensives helped U.S. stocks
bounce off session lows on Thursday, even as sentiment remained
fragile after a spike in new coronavirus cases in China renewed
worries over the scale of the epidemic and its likely impact.
The S&P 500 fell as much as 0.6% in early trading after
China reported a record spike in deaths and thousands more
infections using a new diagnosis method at Hubei, the epicenter
of the outbreak. This changed the mood on Wall Street, where a day earlier
investors had bought on signs that the virus spread was slowing
and helped the three main indexes close at record highs.
"The surge in reported cases today is a one-off change due
to methodology and, by itself, does not imply an acceleration in
the pace of infection," said Seema Shah, chief strategist at
Principal Global Investors.
"However, if the change in methodology does result in a rise
in the growth rate of reported cases, market sentiment will
inevitably deteriorate."
Lending some support were comments from the World Health
Organization's emergency measures director that infections were
not rising dramatically outside China. U.S. stocks have been particularly resilient in the face of
the outbreak because the Federal Reserve and other central banks
seem ready to ease monetary policies if required, said Mark
Heppenstall, chief investment officer at Penn Mutual Asset
Management in Horsham, Pennsylvania.
Fed Chair Jerome Powell earlier this week reiterated his
confidence in the U.S. economy in his testimony to the Congress
and said the central bank was monitoring the coronavirus and
other threats. At 1:26 p.m. ET, the Dow Jones Industrial Average .DJI
fell 0.25% to 29,478.86. The S&P 500 .SPX ticked 0.04% lower
to 3,377.96 and the Nasdaq Composite .IXIC was down 0.05% at
9,720.99.
Real estate .SPLRCR , utilities .SPLRCU and consumer
staples .SPLRCS were the biggest percentage gainers among the
11 main S&P sectors.
Cisco Systems Inc CSCO.O declined more than 5%, the
biggest drag on the three indexes, following the network gear
maker's lackluster revenue and profit forecasts. NetApp Inc NTAP.O fell about 9% as the data storage
equipment maker's current-quarter profit forecast fell short of
expectations.
Kraft Heinz Co KHC.O shed 7% as it missed quarterly sales
estimates and wrote down the value of some businesses, including
coffee brand Maxwell House, by $666 million. Declining issues outnumbered advancers for a 1.07-to-1 ratio
on the NYSE and for a 1.09-to-1 ratio on the Nasdaq.
The S&P index recorded 53 new 52-week highs and three new
lows, while the Nasdaq recorded 127 new highs and 49 new lows.