Disconnect? Stocks rising despite fears over the coronavirus

NEW YORK (AP) — The coronavirus outbreak has exposed a seeming disconnect between the financial markets and science.

Health experts don't know how far the virus from China will spread and how bad the crisis will get, yet stocks are rallying as if investors are expecting no more than a modest hit to the global economy.

On Wall Street, the S&P 500 erased all its losses from the past few weeks and hit a record on Wednesday, while markets in Japan and Hong Kong, closer to the center of the crisis, rose as well. The gains came even as the number of people infected globally surged to more than 24,500 and the death toll climbed to 491, with the overwhelming majority of cases in China.

Investors aren't pretending to know any more than the scientists. But after an initial, mini-freakout over worries about a big blow to China, the world’s second-largest economy with 1.4 billion people, and the potential ripple effects, investors are taking into account better-than-expected earnings from some of the globe's biggest companies and other encouraging economic indicators from outside China.

Perhaps most important, investors are looking at more than just the public health measures that are being taken against the virus; they are taking into account the financial tools available to counter the economic damage.

They are hoping that even if the virus spreads further, central banks can once again come to the rescue and prop up the global economy by cutting interest rates and offering other stimulus, much as they have done since the 2008 financial crisis. Early this week, in fact, China's central bank announced plans to pump $173 billion into the economy to help calm markets.

“We listen to health care experts,” said Nate Thooft, global head of asset allocation at Manulife Asset Management. "We are reading research from epidemiologists. But as with anything with the market, there's a level of faith and hope and underlying sentiment that keeps people in the market. People are still willing to hang onto equities because they haven't been scared enough."

Such faith perhaps shouldn't come as a surprise. The U.S. stock market has been running higher since the spring of 2009, its longest bull run on record, and has repeatedly beaten back worries about impending recessions, global trade wars and the threat of real war — for example, after the U.S. drone strike last month that killed a top Iranian general. 

RELATED: Take a look at the coronavirus outbreak across Chinese regions:

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China coronavirus outbreak spreads across regions
In this photo released by China's Xinhua News Agency, Chinese President Xi Jinping talks by video with patients and medical workers at the Huoshenshan Hospital in Wuhan in central China's Hubei Province, Tuesday, March 10, 2020. China's president visited the center of the global virus outbreak Tuesday as Italy began a sweeping nationwide travel ban and people worldwide braced for the possibility of recession. For most people, the new coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia. (Xie Huanchi/Xinhua via AP)
A traveler wears a face mask as he sits in a waiting room at the Beijing West Railway Station in Beijing, Tuesday, Jan. 21, 2020. A fourth person has died in an outbreak of a new coronavirus in China, authorities said Tuesday, as more places stepped up medical screening of travelers from the country as it enters its busiest travel period. (AP Photo/Mark Schiefelbein)
A girl wearing a face mask sits among suitcases at Hong Kong International Airport in Hong Kong, Tuesday, Jan. 21, 2020. Face masks sold out and temperature checks at airports and train stations became the new norm as China strove Tuesday to control the outbreak of a new coronavirus that has reached four other countries and territories and threatens to spread further during the Lunar New Year travel rush. (AP Photo/Ng Han Guan)
Travelers wearing face masks gather at Hong Kong International Airport in Hong Kong, Tuesday, Jan. 21, 2020. Face masks sold out and temperature checks at airports and train stations became the new norm as China strove Tuesday to control the outbreak of a new coronavirus that has reached four other countries and territories and threatens to spread further during the Lunar New Year travel rush. (AP Photo/Ng Han Guan)
Staff in biohazard suits hold a metal stretcher by the in-patient department of Wuhan Medical Treatment Center, where some infected with a novel coronavirus are being treated, in Wuhan, China, Tuesday, Jan. 21, 2020. Heightened precautions were being taken in China and elsewhere Tuesday as governments strove to control the outbreak of the coronavirus, which threatens to grow during the Lunar New Year travel rush. (AP Photo/Dake Kang)
Peatones con máscaras de protección en una zona comercial de Tokio, el jueves 16 de enero de 2020. (AP Foto/Eugene Hoshiko)
Health workers wear protective gear Wednesday, Aug. 27, 2003, in Ward E3 of the Alice Ho Miu Ling Nethersole Hospital in Hong Kong's New Territories, where 24 patients were quarantined after seven of its health workers developed flu-like symptoms, although none have tested positive for SARS. According to a hospital spokesperson five nurses and two health care assistants working in the hospital's Ward E3 developed symptoms such as coughs, sore throats and fevers on Friday. Hong Kong's health chief, Dr.Yeoh Eng-kiong, said that preliminary test results showed patients' samples did not contain coronavirus that causes SARS and researchers are trying to identify the cause of the illness. (AP Photo/Anat Givon)
WUHAN, CHINA - JANUARY 21 2020: Workers monitor screens for fever signs on passengers detected by infrared detectors at Hankou Railway Station in Wuhan in central China's Hubei province Tuesday, Jan. 21, 2020. A new type of coronavirus has infected hundreds of people in the city.- PHOTOGRAPH BY Feature China / Barcroft Media (Photo credit should read Feature China / Barcroft Media via Getty Images)
WUHAN, CHINA - JANUARY 21 2020: Passengers wearing protective masks walk inside Hankou Railway Station in Wuhan in central China's Hubei province Tuesday, Jan. 21, 2020. A new type of coronavirus has infected hundreds of people in the city.- PHOTOGRAPH BY Feature China / Barcroft Media (Photo credit should read Feature China / Barcroft Media via Getty Images)
WUHAN, CHINA - JANUARY 21 2020: Passengers wearing protective masks walk outside Hankou Railway Station in Wuhan in central China's Hubei province Tuesday, Jan. 21, 2020. A new type of coronavirus has infected hundreds of people in the city.- PHOTOGRAPH BY Feature China / Barcroft Media (Photo credit should read Feature China / Barcroft Media via Getty Images)
WUHAN, CHINA - JANUARY 21 2020: Passengers wearing protective masks walk inside Hankou Railway Station in Wuhan in central China's Hubei province Tuesday, Jan. 21, 2020. A new type of coronavirus has infected hundreds of people in the city.- PHOTOGRAPH BY Feature China / Barcroft Media (Photo credit should read Feature China / Barcroft Media via Getty Images)
BEIJING, CHINA - JANUARY 21: Chinese travellers wear protective masks as they arrive to board trains at Beijing Railway station before the annual Spring Festival on January 21, 2020 in Beijing, China. The number of cases of a deadly new coronavirus rose to nearly 300 in mainland China Tuesday as health officials stepped up efforts to contain the spread of the pneumonia-like disease which medicals experts confirmed can be passed from human to human. The number of those who have died from the virus in China climbed to six on Tuesday and cases have been reported in other parts of Asia including in Thailand, Japan, Taiwan and South Korea. (Photo by Kevin Frayer/Getty Images)
YICHANG, CHINA - JANUARY 21 2020: Travelers wearing protective masks walk outside a railway station in Yichang in central China's Hubei province Tuesday, Jan. 21, 2020. China has stepped up the measures to control the spread of the new coronavirus that has infected hundreds of people in China.- PHOTOGRAPH BY Feature China / Barcroft Media (Photo credit should read Feature China / Barcroft Media via Getty Images)
BEIJING, CHINA - JANUARY 21: A Chinese girl wears a protective mask as her mother pushes her on a suitcase to board a train at Beijing Railway station before the annual Spring Festival on January 21, 2020 in Beijing, China. The number of cases of a deadly new coronavirus rose to nearly 300 in mainland China Tuesday as health officials stepped up efforts to contain the spread of the pneumonia-like disease which medicals experts confirmed can be passed from human to human. The number of those who have died from the virus in China climbed to six on Tuesday and cases have been reported in other parts of Asia including in Thailand, Japan, Taiwan and South Korea. (Photo by Kevin Frayer/Getty Images)
In this March 23, 2020 photo released by Xinhua News Agency, workers disinfect a subway train in preparation for the restoration of public transport in Wuhan, in central China's Hubei province. China's health ministry says Wuhan has now gone several consecutive days without a new infection, showing the effectiveness of draconian travel restrictions that are slowly being relaxed around the country. (Xiao Yijiu/Xinhua via AP)
In this March 18, 2020 photo released by China's Xinhua News Agency, people applaud as departing medical workers enter Wuhan Tianhe International Airport in Wuhan in central China's Hubei Province. Last month, Wuhan was overwhelmed with thousands of new cases of coronavirus each day. But in a dramatic development that underscores just how much the outbreak has pivoted toward Europe and the United States, Chinese authorities said Thursday that the city and its surrounding province had no new cases to report. The virus causes only mild or moderate symptoms, such as fever and cough, for most people, but severe illness is more likely in the elderly and people with existing health problems. (Ke Hao/Xinhua via AP)
En esta fotografía del domingo 8 de marzo de 2020, difundida por la Agencia de Noticias Xinhua, trabajadores con trajes protectores limpian un hospital que se improvisó en un escenario deportivo después de que fuera cerrado oficialmente en Wuhan, provincia de Hubei, en el centro de China. (Xiao Yijiu/Xinhua vía AP)
Office workers wearing mask against coronavirus move past lantern decorations in a mall and office building in Beijing on Thursday, March 19, 2020. China has only just begun loosening draconian travel restrictions within the country, but has stepped-up 14-day quarantine regulations on those arriving in Beijing, Shanghai and elsewhere from overseas, amid expectations of a new influx of students and others returning home. (AP Photo/Ng Han Guan)
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“Everybody knows that it's going to have an impact on the global economy and specifically China,” said Scott Ladner, chief investment officer for Horizon Investments. "It's not that there's going to be zero impact. It's that we don't think the impact is going to be long-lasting or so severe that there can't be governmental policies to help blunt the impact."

While stock analysts might feel confident that the economic impact can be contained, public health experts don't know yet what course the outbreak will take. In fact, they are still trying to answer basic questions about the virus, including just how easily it spreads and how deadly it is.

Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, said Wednesday that there is still a “window of opportunity” to contain the outbreak and that the U.N. agency is focusing its efforts on helping Chinese authorities stem the spread of the virus from the city of Wuhan, where it first emerged over a month ago.

At the same time, Tedros said that in the preceding 24 hours, the WHO had seen the biggest jump in cases since the start of the epidemic.

U.S. health officials said it would be premature to comment on when the outbreak might peak or whether strategies to contain it are working.

“We’re preparing as if this is a pandemic,” said Dr. Nancy Messonnier of the Centers for Disease Control and Prevention. A pandemic is defined as outbreaks of a disease on at least two continents.

Researchers around the world are scrambling to develop a vaccine, but even if testing and manufacturing go perfectly, it may take at least a year before one is is ready for widespread use. Similarly, it is too early to tell if some promising potential treatments work any better than standard ones.

In other developments Wednesday:

— The WHO asked for $675 million to help countries deal with the expected spread of the virus. Tedros acknowledged that is a lot, but “it's much less than the bill we will face if we do not invest in preparedness now.”

— Two planes carrying about 350 Americans evacuated from Wuhan landed in California. They will be quarantined for 14 days at two military bases.

— Nearly 3,700 people face a two-week quarantine in their cabins on a cruise ship in the port city of Yokohama, Japan, while in Hong Kong, more than 3,600 people on another ship awaited screening after it was banned by Taiwan.

— As thousands of hospital workers in Hong Kong went on strike for a third day to demand the border with mainland China be closed completely, the city announced that all people entering from the mainland, including Hong Kong residents, must be quarantined for 14 days.

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Johnson reported from Seattle, Cheng from London. Associated Press business writer Alex Veiga in Los Angeles also contributed .

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