By Anna Hirtenstein and Karen Langley

U.S. stocks climbed to new highs Wednesday as concerns about the economic impact of the coronavirus outbreak continued to ease.

The S&P 500 added 0.5% and the Nasdaq Composite advanced 0.7%, a day after both indexes closed at new highs. The Dow Jones Industrial Average gained 0.8%, putting it on pace for a record close as well.

Shares that had fallen in recent days as investors worried about the economic effects of the outbreak in China -- such as energy companies and cruise lines -- posted gains Wednesday.

Although more than 44,000 people have been infected with the coronavirus globally, the spread of the disease appears to be slowing, according to China's National Health Commission.

"The coronavirus is still the main narrative," said James Athey, a senior investment manager at Aberdeen Standard Investments. The economic impact of the virus is still unclear, as figures for the first quarter haven't been released yet, he said. "The market is finding a way to consistently see the positive in everything in the absence of bad news."

As concerns about the outbreak's effect on demand receded, Brent crude, the global benchmark for oil, climbed for a second day. It gained 3.4% to trade at $55.83 a barrel.

The energy sector, the S&P 500's weakest-performing group this year, was among the broad stock index's leaders, rising 1%.

Companies that have seen their share prices fall amid concerns about the outbreak gained ground. Shares of Royal Caribbean Cruises, Norwegian Cruise Line Holdings and Carnival each rose more than 2%. Airline shares also ticked upward, with United Airlines Holdings, Delta Air Lines and American Airlines Group each adding more than 1%.

"Today the rally is led by the laggards," said Olivier Sarfati, head of equities at GenTrust.

Haven assets slipped as market sentiment improved. The yield on 10-year U.S. Treasurys rose to 1.623%, from 1.589% Tuesday. Bond yields rise as prices fall.

Investors watched Tuesday and Wednesday as Federal Reserve Chairman Jerome Powell testified before Congress. On Tuesday, Mr. Powell said the U.S. central bank is monitoring disruption from the coronavirus in China and focusing on effects on the U.S. economy. He said it was too early to tell if the outbreak would change the Fed's view that interest rates are at an appropriate level.

Among individual stocks, Bed Bath & Beyond plunged 20% after the home-goods retailer said sales declined in December and January. Lyft declined 9.6% after the ride-hailing company said that it doesn't expect to turn a profit until the end of 2021.

Shopify, meanwhile, rallied 11% after its revenue outlook was unexpectedly positive.

With about 70% of S&P 500 companies having reported, analysts are expecting earnings to grow 0.8% in the fourth quarter from a year earlier.

Overseas, the Stoxx Europe 600 gained 0.6% and the Shanghai Composite Index closed up 0.9%.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and Karen Langley at karen.langley@wsj.com

(END) Dow Jones Newswires

February 12, 2020 14:33 ET (19:33 GMT)

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