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S&P 500 aims for record open on IBM support, fading China virus fears

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(Reuters) - U.S. stock index futures pointed to fresh highs for the S&P 500 on Wednesday, as investors took heart from China’s efforts to contain a deadly virus outbreak, while strong results from IBM and Netflix boosted earnings optimism.

Wall Street’s main indexes slipped from record highs on Tuesday after officials confirmed the first U.S. case of the coronavirus that has killed nine and infected 440 in China.

The outbreak, which revived fears of a pandemic similar to the Severe Acute Respiratory Syndrome (SARS) in 2003, roiled travel and airline stocks on Tuesday, as millions of people prepared to travel for the Chinese Lunar New Year.

A batch of strong earnings reports helped lift sentiment.

International Business Machines Corp (IBM.N) rose 4.4% in premarket trading after forecasting full-year profit above market expectations on strength in its high-margin cloud computing business.

Netflix Inc (NFLX.O) rose 1.9% as international growth helped the streaming video service beat expectations for subscription growth, even as it warned of a tough first quarter.

U.S. semiconductor stocks benefited from a strong forecast from Dutch firm ASML Holding NV (ASML.AS), the latest large chipmaker to indicate a recovery in the sector.

Chip-gear maker Applied Materials Inc (AMAT.O) rose 1.9%, while Micron Technology Inc (MU.O) and Advanced Micro Devices Inc (AMD.O) gained about 1% each.

Among the weak spots was Johnson & Johnson (JNJ.N), dropping 1.6% after missing quarterly revenue estimates due to disappointing sales of its blockbuster psoriasis medicine Stelara and cancer drug Imbruvica.

With markets looking to regain momentum following a wobbly session on Tuesday, investors kept a close watch on developments around U.S. President Donald Trump’s impeachment trial and the annual meeting of world leaders and business heads in Davos.

At 7:30 a.m. ET, Dow e-minis 1YMcv1 were up 90 points, or 0.31%. S&P 500 e-minis EScv1 were up 14.25 points, or 0.43% and Nasdaq 100 e-minis NQcv1 were up 70 points, or 0.76%.

Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila

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