US STOCKS-S&P 500, Nasdaq hit record on IBM, waning China virus fears

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* IBM shares jump on strong forecast, earnings
* Chipmakers rise after upbeat ASML outlook
* J&J slides after disappointing FY profit forecast
* Indexes up: Dow 0.29%, S&P 0.36%, Nasdaq 0.54%

(Updates to open)
By Sruthi Shankar
Jan 22 (Reuters) - The S&P 500 and the Nasdaq scaled new
highs on Wednesday, as an upbeat forecast from IBM added to
optimism over earnings, while China's efforts to contain a virus
outbreak eased worries about a wider financial fallout.
International Business Machines Corp IBM.N shares jumped
4.1% after it forecast full-year profit above market
expectations on strength in its high-margin cloud computing
business. Technology stocks .SPLRCT , which have played a main role
in Wall Street's recent record run, rose 0.8%.
Investors brushed aside fears from China's new flu-like
virus that has killed nine and infected 440 in the country after
President Xi Jinping said curbing the outbreak and saving lives
was a top priority.
The main indexes retreated from record highs on Tuesday
after officials confirmed the first U.S. case of the
coronavirus. "While the death toll has risen to nine, it feels like
affirmation we're getting out of China is stemming fears that
this is turning into an epidemic," said Art Hogan, chief market
strategist at National Securities in New York.
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.
Netflix Inc's NFLX.O shares gave up gains to trade 3.1%
lower after the streaming video pioneer beat estimates for
quarterly subscription growth, but warned of a tough first
quarter. "Being in the fourth-quarter earnings season is going to be
the tell. We're going to find out if we've gotten ahead of
ourselves or valuations are justified," said Hogan.
At 10:12 a.m. ET, the Dow Jones Industrial Average .DJI
rose 0.29% to 29,280.61.
The S&P 500 .SPX gained 0.36% to 3,332.60 and the Nasdaq
Composite .IXIC was up 0.54% at 9,421.75.
Chip 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. The Philadelphia Semiconductor index .SOX rose 1.2%.
Among the weak spots was Johnson & Johnson JNJ.N , dropping
1.9% after the healthcare conglomerate forecast full-year profit
largely below expectations. Boeing Co BA.N extended losses, down 0.9%, after
announcing further delay in the return of its 737 MAX jets to
service.
Advancing issues outnumbered decliners by a 1.74-to-1 ratio
on the NYSE and a 1.47-to-1 ratio on the Nasdaq.
The S&P index recorded 94 new 52-week highs and one new low,
while the Nasdaq recorded 119 new highs and 13 new lows.