US Markets

US STOCKS-Nasdaq gains on tech stocks, hopes for more stimulus

Credit: REUTERS/BRENDAN MCDERMID

The Nasdaq eked out a modest gain on Thursday with investors betting on more fiscal stimulus, but U.S. President Joe Biden said China was poised to "eat our lunch," a warning that tempered investor enthusiasm for a market near record highs.

By Herbert Lash

NEW YORK, Feb 11 (Reuters) - The Nasdaq eked out a modest gain on Thursday with investors betting on more fiscal stimulus, but U.S. President Joe Biden said China was poised to "eat our lunch," a warning that tempered investor enthusiasm for a market near record highs.

Gains in Nvidia Corp NVDA.O and Intel Corp <INTC.O> helped make technology.SPLCRT the only sector on the S&P 500 and Nasdaq to rise, with all others declining.

Biden told a group of U.S. senators in a meeting to discuss the need to upgrade U.S. infrastructure that the United States must raise its game in the face of the challenge from China.

The warning about China and Democrat plans to include raising the minimum wage to $15 in a $1.9 trillion stimulus package showed headwinds for investors could be on the rise, said Ed Moya, senior market analyst at OANDA in New York.

"Markets are starting to get a little bit nervous over the relations between the West and China," Moya said.

Biden's first call late Wednesday with China's President Xi Jinping "resurfaced all of the difficulties that we're going to face this year in addition to the pandemic," he said.

The Democrats also are not in agreement on where they stand on the minimum wage, he said. "This is dragging out stimulus talks."

Mastercard <MA.N> also rose after the credit-card company said it was planning to offer support for some cryptocurrencies on its network this year, joining a string of big-ticket firms that have pledged similar support.

Bank of New York Mellon BK.Nadvanced after saying it had formed a new unit to help clients hold, transfer and issue digital assets, sending Bitcoin BTC=BTSP to an all-time high of $48,481.

The number of Americans filing new applications for unemployment benefits were 793,000 last week, compared to 812,000 in the prior week, but they are well below the record 6.867 million reported last March when the pandemic hit the United States.

Wall Street's main indexes have hit record highs recently on prospects of the $1.9 trillion relief bill that aims to jump start the U.S. economy, while a largely better-than-expected earnings season also has bolstered sentiment.

Analysts now expect fourth-quarter earnings for S&P 500 firms to grow 3%, versus a 10.3% decline forecast at the beginning of January, per Refinitiv data. Stocks are trading with high multiples, raising fears the market is overvalued.

"The market is certainly fairly valued. I don't see the overall market as horribly overvalued," said David Trainer, chief executive of New Constructs, a research firm in Nashville, Tennessee "There are pockets of stocks, we call them micro bubbles, that are extremely overvalued."

Unofficially, the Dow Jones Industrial Average .DJI rose 2.54 points, or 0.01%, to 31,440.34, the S&P 500 .SPX gained 8.03 points, or 0.21%, to 3,917.91 and the Nasdaq Composite .IXIC added 57.55 points, or 0.41%, to 14,030.09.

The tech sector .SPLRCT and semiconductors .SOX hit record highs, while economy-linked energy .SPNY and industrials .SPLRCI took a back seat after being in the spotlight this year.

U.S.-listed shares of cannabis companies including Tilray TLRY.O and Aphria APHA.O reversed premarket gains to drop 42% and 20% after the sector caught the attention of Reddit-inspired retail investors this week.

Walt Disney Co DIS.N was nearly flat ahead of its results after market close.

Pinterest Inc PINS.N rallied after a report said Microsoft Corp MSFT.O approached the image-sharing company in recent months about a potential buyout. The negotiations were, however, currently not active, according to the report.

(Reporting by Herbert Lash, additional reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Maju Samuel and Diane Craft)

((herb.lash@thomsonreuters.com; 1-646-223-6019; Reuters Messaging: herb.lash.reuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

NVDA INTC MA BK SPX TLRY DIS PINS MSFT PYPL

Latest US Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More