TORONTO -- TORONTO -- Canada's main stock index rebounded from morning losses after the World Health Organization tempered fears that a deadly virus outbreak in China was a global crisis.

The S&P/TSX composite index closed up 21.92 points to a new record close of 17,621.78 after hitting an intraday low of 17,540.77.

Sentiment began to shift around noon when the WHO said it decided against declaring the outbreak a global emergency for now.

"So the market took a little bit of solace in that and has been steadily creeping higher for the balance of the afternoon," said Mike Archibald, associate portfolio manager with AGF Investments Inc.

The sectors hit hardest by investor anxiety have been commodities and airlines, which have come under pressure over worries about weaker demand in China.

Situations like the virus are historically difficult to forecast, so there tends to be a little more volatility, much like what happened with the Ebola crisis and SARS, Archibald said.

"You tend to have a short-term market setback that usually gets absorbed and then the stock market tends to be higher once you get a proper resolution to the concerns," he said in an interview.

"There's a lot of momentum in this market and it doesn't appear as though there's an overriding concern at the moment that this is going to escalate into something more significant."

U.S. markets followed a similar trajectory. In New York, the Dow Jones industrial average was down 26.18 points at 29,160.09. The S&P 500 index was up 3.79 points at 3,325.54, while the Nasdaq composite was up 18.71 points at 9,402.48.

Archibald said the stock market is extremely overbought because investors are very bullish. That puts them at risk that a minor headline could prompt a temporary setback.

But he said it should take a lot for the sentiment to change given that U.S. earnings have been decent.

Markets would likely react to headlines like they did during the trade war between the U.S. and China. However, the health threat won't likely last nearly as long unless there is a huge spike in the number of cases or it spreads to new parts of the world.

Archibald said there's a potential for a temporary setback even though markets continue to set record highs almost daily.

"If you got a three to five per cent pullback in the market it would be wise to start putting money to work. I still think the first half of this year is going to continue to be very good for investors."

The defensive utilities sector performed the best on Thursday. It was one of nine of the 11 major sectors to be positive.

Energy was weakest, falling with declining crude oil prices.

The March crude contract was down US$1.15 at US$55.59 per barrel and the March natural gas contract was up 0.4 of a cent at US$1.90 per mmBTU.

Encana shares were unchanged on massive volume of 97.4 million shares ahead of it being removed from the TSX as it relocates to the U.S. and is rebranded Ovintiv.

Materials was also lower despite higher gold prices as First Quantum Minerals Ltd. dropped 4.4 per cent.

The February gold contract was up US$8.70 at US$1,565.40 an ounce and the March copper contract was down 3.9 cents at US$2.73 a pound.

The Canadian dollar traded for 76.09 cents US compared with an average of 76.24 cents US on Wednesday.

This report by The Canadian Press was first published Jan. 23, 2020.