Asian shares mostly higher after rebound on Wall Street

Shares advanced in most Asian markets on Wednesday after a rebound on Wall Street that reversed most losses from a sell-off the day before.

Hong Kong's Hang Seng dropped 2.8%, to 27,174.43 after reopening from Lunar New Year holidays, while other Chinese markets remained closed.

The U.S. rally overnight snapped a two-day skid driven by fears that the spread of a new virus in China could snag global economic growth. China reported Wednesday that the virus has sickened more than 6,000 people in China and over a dozen other countries and killed 132 people.

Tokyo's Nikkei 225 index gained 0.7% to 23,379.40 and in South Korea the Kospi picked up 0.5% to 2,188.04. Australia's S&P ASX/200 rose 0.5% to 7,031.50, while the Sensex in India climbed 0.8% to 41,283.40. Shares also rose in Southeast Asia, apart from Kuala Lumpur, which fell 1.4% as trading resumed after the Lunar New Year.

Investors placed their concerns about the virus’ potential economic impact on the back burner on Tuesday and snapped up U.S. stocks beaten down earlier in the week, particularly chipmakers and other technology companies. The sector notched the biggest gain Tuesday and powered much of the rally.

The S&P 500 index rose 1% to 3,276.24. The Dow gained 0.7% to 28,722.85. The Nasdaq climbed 1.4% to 9,269.68, while the Russell 2000 index of smaller company stocks picked up 0.9%, to 1,658.31.

But the potential for still more virus-related scares remains, analysts cautioned.

“Markets may enjoy one or two days in the sun. I would be remiss in my role as the voice of reason if I did not caution investors to be wary of chasing, what may be temporary, dead cat bounces," Jeffrey Halley of Oanda said in a commentary, “Until we have much more clarity on the controlling of the Wuhan virus outbreak at the very least."

Bond prices fell, sending yields higher following a significant drop a day earlier. The yield on the 10-year Treasury climbed to 1.65% from 1.60% late Tuesday.

Despite the rebound, the major U.S. indexes are still down for the week. The losses have hit smaller company stocks hardest, erasing the Russell 2000’s gains for the year.

U.S. stocks were running at all-time highs at the start of the month. An index measuring volatility in the market was running at 12-month lows and the benchmark S&P 500 had climbed around 13% since early October after Washington and Beijing announced they would sign a preliminary trade deal.

That set the market up for a pullback, and investors’ jitters over the virus outbreak centered on the central Chinese city of Wuhan fit the bill.

“It may be symptomatic about how bullish overall people have been and how much money still sits on the sidelines,” Frederick said. “People are just looking for any opportunity to get a bargain right now, but it could ultimately end up being a little bit risky to do that.”

Hong Kong has joined much of China in seriously restricting travel by cutting all rail links to the mainland as of Friday. China's containment efforts began with the suspension of plane, train and bus links to Wuhan and has now expanded to 17 cities with more than 50 million people in the most far-reaching disease-control measures ever imposed.

The United States and several other nations were taking steps to airlift citizens out of a Chinese city at the center of the outbreak. Still, U.S. health officials said Tuesday that, for now, the risks to Americans is very low.

Otherwise, it's a heavy week for corporate earnings. Boeing, McDonald’s, Facebook and Microsoft will all report results on Wednesday. Other big names reporting this week include Coca-Cola, Amazon, Caterpillar and Exxon Mobil.

The Federal Reserve is also set to deliver its latest interest rate and economic policy update Wednesday. The central bank lowered its key interest rate three times last year in a bid to shield the economy from slowing global growth and the fallout from the U.S.-China trade war.

Benchmark crude oil rose 59 cents to $54.07 per barrel in electronic trading on the New York Mercantile Exchange. It gained 34 cents to settle at $53.48 a barrel on Tuesday. Brent crude oil, the international standard, gained 65 cents to $59.46 per barrel. Overnight it picked up 23 cents to close at $58.81 a barrel.

Gold fell $4.30 to $1,565.50 per ounce, silver was unchanged at $17.46 per ounce and copper fell 2 cents to $2.58 per pound.

The dollar slipped to 109.09 Japanese yen from 109.12 yen on Monday. The euro fell to $1.1018 from $1.1025.

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AP Business Writers Alex Veiga and Damian J. Troise contributed.