S&P 500, Nasdaq gain on Nvidia, White House stock incentive report

Traders work on the floor of the New York Stock Exchange. — Reuters pic

NEW YORK, Feb 15 — The S&P 500 ended modestly higher yesterday following strong earnings from Nvidia and a report late in the session that the White House was considering a tax incentive for Americans to buy stocks.

Uncertainties surrounding the coronavirus epidemic and downbeat economic data had put a damper on investor sentiment for much of the day.

But a CNBC report that the Trump administration could introduce a tax incentive for people earning less than US$200,000 (RM 828,300) to invest up to US$10,000 in US stocks gave the markets a late boost.

“In an election year, especially when the president is getting backlash that the tax cut benefits only the rich, seeking a way to democratise the stock market to low income earners would be a popular maneuver,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta.

While the S&P 500 and the Nasdaq closed modestly higher, the Dow lost ground.

The three major stock averages headed into the US holiday weekend having posted their second consecutive weekly advances.

The coronavirus, now called Covid-19, has taken 1,380 lives and infected 63,851 people, according to Chinese authorities.

In a recent Reuters survey of 40 economists, the respondents see China’s economy in the current quarter suffering its slowest growth since the financial crisis, but believe the downturn will be short-lived if the outbreak is contained.

“The true economic implications of the coronavirus are still unknown,” Sroka said, adding “at the end of the day, earnings matter more for the sustainability of stocks than near-term headlines.”

Indeed, of the 387 companies in the S&P 500 having reported fourth-quarter results, 77.4 per cent have surprised Wall Street expectations to the upside, according to Refinitiv data.

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