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CORRECTED-US STOCKS-Nasdaq, S&P 500 gain on tech stocks, hopes for more stimulus

Herbert Lash
·4 min read
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(Corrects to say technology was the leading sector to gain inparagraph 2, deletes it was the only sector to gain)

* Nvidia leads small rally in technology stocks

* Cannabis shares reverse premarket gains

* Weekly jobless claims edge down

By Herbert Lash

NEW YORK, Feb 11 (Reuters) - The Nasdaq and S&P 500 eked outmodest gains on Thursday with investors betting on more fiscalstimulus, but U.S. President Joe Biden said China was poised to"eat our lunch," a warning that tempered enthusiasm for a marketnear record highs.

Nvidia Corp rose 3.2% and Intel Corp 3.1%,making technology the leading sector to gain on theS&P 500 and Nasdaq. Declining shares outnumbered gainers on theNasdaq and New York Stock Exchange.

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

The warning about China and Democrat plans to includeraising the minimum wage to $15 in a $1.9 trillion stimuluspackage 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 therelations between the West and China," Moya said.

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

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

Mastercard rose 2.6% after the credit-card companysaid it was planning to offer support for some cryptocurrencieson its network this year, joining a string of big-ticket firmsthat have pledged similar support.

Bank of New York Mellon advanced 0.9% after saying ithad formed a new unit to help clients hold, transfer and issuedigital assets, sending Bitcoin to an all-time highof $48,696.

The number of Americans filing new applications forunemployment benefits were 793,000 last week, compared to812,000 in the prior week, but they are well below the record6.867 million reported last March when the pandemic hit theUnited States.

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

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

"The market is certainly fairly valued. I don't see theoverall 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 microbubbles, that are extremely overvalued."

The tech sector and semiconductors hitrecord highs, while economy-linked energy andindustrials took a back seat after being in thespotlight this year.

The S&P 500 gained 6.5 points, or 0.17%, to 3,916.38and the Nasdaq Composite added 53.24 points, or 0.38%,to 14,025.77. The Dow Jones Industrial Average fell 7.1points, or 0.02%, to 31,430.7.

Volume on U.S. exchanges was 17.69 billion shares, comparedwith the 15.96 billion average for the full session over thelast 20 trading days.​ U.S.-listed shares of cannabis companies, including Tilrayand Aphria, reversed premarket gains to drop49.7% and 35.8% after the sector caught the attention ofReddit-inspired retail investors this week.

Walt Disney Co rose 0.7% ahead of its results aftermarket close.

Pinterest Inc rallied 7.3% after a report saidMicrosoft Corp approached the image-sharing company inrecent months about a potential buyout. However, thenegotiations were currently not active, the report said.

Declining issues outnumbered advancing ones on the NYSE by a1.08-to-1 ratio; on Nasdaq, a 1.22-to-1 ratio favored decliners.

The S&P 500 posted 45 new 52-week highs and no new lows; theNasdaq Composite recorded 292 new highs and nine new lows.

(Reporting by Herbert Lash, additional reporting by Medha Singhand Devik Jain in Bengaluru; Editing by Maju Samuel and DianeCraft)