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* Cisco Systems drops after lackluster forecast
* New cases in China jump under new diagnosis method
* Indexes: Dow down 0.14%, S&P and Nasdaq flat
(Adds comment, details; updates prices)
By Medha Singh
Feb 13 (Reuters) - Defensive stocks helped the S&P 500 and
the Nasdaq erase losses to trade flat on Thursday, even though a
sharp rise in new coronavirus cases in China kept investors
worried.
The three main U.S. stock indexes had opened more than 0.5%
lower as China reported a record spike in deaths and thousands
more infections using a new diagnosis method at a province that
is at the center of the outbreak. A day earlier, investors had bought on signs that the virus
spread was slowing, sending the three main indexes to record
closing highs.
"The surge in reported cases today is a one-off change due
to methodology and by itself, doesn't 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 to the market, World Health
Organization's emergency measures director said cases of
coronavirus infections were not rising dramatically outside
China. Penn Mutual Asset Management's chief investment officer,
Mark Heppenstall, said U.S. stocks have been particularly
resilient because the Federal Reserve and other central banks
seem ready to ease monetary policies if required.
Earlier this week, Fed Chair Jerome Powell 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 12:15 a.m. ET, the Dow Jones Industrial Average .DJI
slipped 0.14% to 29,509.37.
The S&P 500 .SPX was up 0.02% at 3,380.14 while the Nasdaq
Composite .IXIC ticked 0.05% higher to 9,730.69.
Real estate .SPLRCR , utilities .SPLRCU and consumer
staples .SPLRCS were the biggest percentage gainers among the
11 main S&P sectors.
Among stocks, Cisco Systems Inc CSCO.O declined more than
5%, the biggest drag on the three indexes, after the network
gear maker's lackluster revenue and profit forecasts.
NetApp Inc NTAP.O fell about 10% as the data storage
equipment maker's current-quarter profit forecast fell short of
expectations.
Kraft Heinz Co KHC.O shed 8.6% as it missed quarterly
sales estimates and wrote down the value of some businesses,
including coffee brand Maxwell House, by $666 million.
Advancing issues outnumbered decliners by a 1.02-to-1 ratio
on the NYSE. Declining issues outnumbered advancers for a
1.03-to-1 ratio on the Nasdaq.
The S&P index recorded 45 new 52-week highs and three new
lows, while the Nasdaq recorded 113 new highs and 45 new lows.