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)

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 shares jumped 4.1% after it forecast full-year profit above market expectations on strength in its high-margin cloud computing business.

Technology stocks, 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 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 rose 0.29% to 29,280.61.

The S&P 500 gained 0.36% to 3,332.60 and the Nasdaq Composite was up 0.54% at 9,421.75.

Chip stocks benefited from a strong forecast from Dutch firm ASML Holding NV, the latest large chipmaker to indicate a recovery in the sector.

The Philadelphia Semiconductor index rose 1.2%.

Among the weak spots was Johnson & Johnson, dropping 1.9% after the healthcare conglomerate forecast full-year profit largely below expectations.

Boeing Co 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. (Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)