• Reuters

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The Nasdaq hit a record high on Tuesday and the S&P 500 headed for its biggest one-day gain in about six months as fears of a heavy economic impact from the coronavirus outbreak waned after China’s central bank intervened.

The Dow was on pace for its biggest single-day rise in about eight months, as the stock marked recovered from steep losses in the prior week.

The People’s Bank of China (PBOC) injected a total of 1.7 trillion yuan ($242.74 billion) through reverse repos on Monday and Tuesday, as the central bank said it sought to stabilize financial market expectations and restore market confidence.

The stimulus boosted investor sentiment even as fallout from the coronavirus from China is expected to deliver a short, sharp blow to both Chinese and global economic activity in the first quarter.

“The market is just looking beyond coronavirus and they are cheering” China’s financial actions, said Lindsey Bell, chief investment strategist with Ally Invest.

“What history has shown us is anytime there is any sort of epidemic or some global threat from a virus standpoint, what we have seen is that the market will bottom…” Bell said. “Everybody is just looking past that, even though the market didn’t move that much lower on the news, at least here in the U.S.”

The Dow Jones Industrial Average rose 478.26 points, or 1.68 percent, to 28,878.07, the S&P 500 gained 55.44 points, or 1.71 percent, to 3,304.36 and the Nasdaq Composite added 196.98 points, or 2.12 percent, to 9,470.38.

Adding to the optimism was U.S. data showing new orders for U.S.-made goods increased by the most in nearly 1-1/2 years in December.

Technology shares led gains among the S&P 500 sectors, rising 2.6 percent. Shares of chip companies, which are particularly exposed to China, surged, with the Philadelphia Semiconductor index up 3.0 percent.

Shares of Alphabet fell 2.9 percent, after the Google parent posted its first holiday-quarter revenue miss in five years.

Fourth-quarter earnings season is roughly halfway done, with S&P 500 companies expected to have increase earnings by 1.6 percent in the period, according to IBES data from Refinitiv.

Investors were also keeping an eye on the U.S. Democratic presidential nominating race, where technical problems delayed the Iowa caucus results. Results are expected at 5 p.m. ET.

In company news, shares of Tesla Inc surged 18.7 percent, extending a stunning rally for the electric vehicle maker’s stock.

Ralph Lauren Corp shares rose 10.2 percent after the company’s results.

Advancing issues outnumbered declining ones on the NYSE by a 3.07-to-1 ratio; on Nasdaq, a 2.84-to-1 ratio favored advancers.

The S&P 500 posted 64 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 116 new highs and 43 new lows.

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