January 29, 2020 / 3:58 PM / 21 days ago

US STOCKS-Wall St off early highs as weak earnings, coronavirus concerns weigh

* Apple, Boeing keep Dow in positive territory

* Starbucks slips as coronavirus prompts store closures in China

* Fed expected to hold rates, statement due at 2:00 pm ET

* Indexes up: Dow 0.31%, S&P 0.11%, Nasdaq 0.06% (Updates to open)

By Sruthi Shankar and Ambar Warrick

Jan 29 (Reuters) - U.S. stock indexes retreated from early highs on Wednesday as a spate of disappointing earnings reports offset strong gains in Apple and Boeing, while investors assessed the economic impact of the fast-spreading coronavirus outbreak.

Several companies warned of disruption to their operations due to the virus outbreak, while a Chinese government economist was also quoted as saying the country’s economic growth may drop to 5% or even lower.

Starbucks Corp dropped 2.9% after warning of a financial hit as it closed thousands of restaurants and adjusted operating hours in China.

American Airlines Group Inc and United Airlines Holdings Inc said they were canceling some flights to China, while Royal Caribbean Cruises Ltd said its 2020 earnings would be hurt after it canceled three trips of its China-based cruise liner.

“The market remains a bit uneasy about the situation in China,” said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

“There’s still a feeling that as good as things have been up till now, you could see problems in China lead to a slowing in the next quarter.”

The indexes opened up about 0.4%, but the gains quickly evaporated as shares in AT&T, Advanced Micro Devices Inc and Anthem Inc fell following their results.

Apple Inc, however, gained 2.3% after reporting earnings for the holiday shopping quarter above analysts’ expectations, even as it braced for more supply disruptions in virus-hit China.

Boeing Co jumped 2.4% after the planemaker’s forecast of nearly $19 billion in costs related to the grounding of its 737 MAX jets was smaller than analysts’ expectations.

At 10:32 a.m. ET, the Dow Jones Industrial Average was up 0.31%, at 28,811.23.

The S&P 500 rose 0.11%, at 3,279.91 and the Nasdaq Composite gained just 0.06%, at 9,275.54.

Investors were also on the sidelines ahead of the Federal Reserve’s statement later in the day from its policy meeting. Interest rates will almost certainly remain on hold.

Advanced Micro Devices Inc dropped 7% after the chipmaker forecast first-quarter revenue largely below analysts’ estimates due to waning demand from gaming console makers.

AT&T Inc fell 2.4% after it missed fourth-quarter revenue estimates, while Anthem Inc dropped 5.6% after the health insurer missed estimates for medical costs in the fourth quarter.

General Electric jumped 10% after the industrial conglomerate reported quarterly profit and cash flow that exceeded analysts’ estimates, boosted by its aviation unit.

Advancing issues outnumbered decliners by a 1.26-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.14-to-1 ratio on the Nasdaq.

The S&P index recorded 25 new 52-week highs and four new lows, while the Nasdaq recorded 54 new highs and 32 new lows. (Reporting by Sruthi Shankar and Ambar Warrick in Bengaluru; Editing by Arun Koyyur and Anil D’Silva)

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