Stocks rally after strong factory data, pare back coronavirus losses

Stocks surged Monday morning to recover some of Friday’s coronavirus slide, as a key gauge of U.S. manufacturing turned positive for the first time in five months.

The Dow Jones Industrial Average rose more than 300 points Monday, a 1 percent rise, after losing more than 600 points Friday amid rising concern about the lethal coronavirus. The S&P 500 rose 1.1 percent, while the Nasdaq composite gained 1.4 percent shortly after 10 a.m. Monday.

Monday’s rally followed the release of data from the Institute for Supply Management manufacturing activity index for January. The gauge, which measures U.S. factory activity, rose to 50.9 percent from 47.8 percent the previous month, breaching 50 percent for the first time since July. A reading above 50 indicates expansion in the sector, while a reading below 50 reflects contraction.

The overall stock gains helped pare some of Wall Street’s steep losses last week when confirmed cases of the coronavirus steadily rose in Wuhan, dealing a blow to the Chinese economy. Major U.S. airlines suspended service to China last week as the federal government warned Americans against traveling to the country.

Stocks in China and Japan plummeted Monday morning as the number of confirmed coronavirus cases rose above 17,000 and the death toll climbed to more than 300.