Stock Markets Mostly Rise, As Airlines Act Over Virus

European and US stock indices mostly advanced Wednesday, as positive earnings from Apple and some other companies offset concerns over the spreading coronavirus that has led more airlines to suspend flights to China.

Hong Kong's main stocks index slumped 2.8 percent by the close as traders returning from the Lunar New Year break played catch-up with the global selloff triggered by the epidemic.

But the Dow eked out a gain following a choppy session as the Federal Reserve, as expected, kept interest rates unchanged.

Earlier, bourses in Frankfurt and London edged higher, while Paris enjoyed moderate gains.

Federal Reserve Chair Jerome Powell said remains grounds for "cautious optimism" about the global outlook," but "none of this is assured" given continued uncertainties, including the impact of the virus outbreak.

Apple on Tuesday posted record results for the final three months of last year, owing to gains in iPhone sales.

But Apple Chief Executive Tim Cook struck a somber tone over the spread of the deadly virus in China, a key market for and supplier to the company, while Starbucks and McDonald's were among the large companies curtailing China activities.

The outbreak could deal a heavy blow to China's already-fragile economy, coming during the Lunar New Year holidays when millions criss-cross the country and spend lots of money.

A number of airlines have decided to temporarily halt or reduce flights to China as the country struggles to contain the spread of the virus.

British Airways and Lufthansa have both announced they would suspend flights to China, as has Indonesia's Lion Air Group, which owns the biggest fleet of planes in southeast Asia. Major US carriers, including United Airlines and Delta Air Lines, have reduced service to the country due to low demand.

China has advised its citizens to postpone trips abroad and cancelled overseas group tours, while several countries have urged citizens to avoid travelling to China.

"Markets will remain very volatile due to the (virus) uncertainty and the swings won't subside until we have clear evidence that the virus is fading," said Banny Lam at CEB International Investment.

Among other companies reporting results, Boeing gained 1.7 percent after announcing its first annual loss in more than two decades as a result of the protracted 737 MAX grounding.

The company announced $9.2 billion in additional costs related to the MAX crisis, a huge number, but one that was lower than some analysts feared.

General Electric surged 10.3 percent as it reported better-than-expected fourth-quarter profits that included signs of stabilization in its slumping power business.

Investors are increasingly worried about the economic impact of the coronavirus, which has now killed at least 132 people and infected more people in China than SARS AFP / Anthony WALLACE

But Starbucks dropped 2.1 percent as it announced that it closed half its China stores due to the coronavirus, and said it was too soon to project the potential financial hit from the situation.

New York - DOW: UP less than 0.1 percent at 28,734.45 (close)

New York - S&P 500: DOWN 0.1 percent at 3,273.40 (close)

New York - Nasdaq: UP 0.1 percent at 9,275.16 (close)

London - FTSE 100: UP less than 0.1 percent at 7,483.57 (close)

Frankfurt - DAX 30: UP 0.2 percent at 13,345.00 (close)

Paris - CAC 40: UP 0.5 percent at 5,954.89 (close)

EURO STOXX 50: UP 0.5 percent at 3,736.36 (close)

Hong Kong - Hang Seng: DOWN 2.8 percent at 27,160.63 (close)

Tokyo - Nikkei 225: UP 0.7 percent at 23,379.40 (close)

Shanghai - Composite: Closed for a public holiday

Euro/dollar: DOWN at $1.1005 from $1.1022 at 2200 GMT

Pound/dollar: DOWN at $1.3013 from $1.3028