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Stocks reach for the sky while Bitcoin stages a recovery

The Dow enjoyed its best session in seven weeks, rising 323 points
Boeing aircraft
Up and away
  • Dow up 323 points at 26,116

  • S&P 500 up 26 at 2,803

  • Boeing leads the Dow to new heights

  • Banking results underwhelm

The Dow Jones enjoyed its best day in seven weeks, rising more than 300 points in a single session.

The Dow closed at 26,116, up 323, thanks in no small part to a 4.7% rise by Boeing Co (NYSE:BA), the aircraft maker that signed a deal with Adient to sell a portfolio of seating products to airlines and aircraft leasing products.

Also giving the Dow a lift was International Business Machines Corp (NYSE:IBM) ahead of its results tomorrow evening. “Big Blue” finished the day up 2.9% at US$168.65.

The S&P 500 also had a spectacular day, rising 26 points to 2,803.

Across the border, in Canada, the S&P TSX Composite closed at 16,327, up 27.82.

It was an up-and-down – or, more accurately, a down-and-up – day for Bitcoin, which shortly after the close was trading at US$11,122, up US$605 on the day after falling well below US$10,000 at one point.

Mid-session: Indexes build on early gains

The Dow Jones broke through the 26,000 barrier while the S&P 500 was homing in on 2,800.

The Dow was up 228 at 26,021 while the S&P put on 20 points at 2,796, despite the banking results season not proceeding exactly to plan.

Goldman Sachs Group Inc (NYSE:GS) and US Bancorp (NYSE:USB) were both down around 2% after announcing results, while Bank of America Corp (NYSE:BAC) fared a bit better, shedding 0.9%.

On the crypto-currencies market, Bitcoin struggled back above US$10,000 to US$10,109 but was still down US$508 on the day.

Open: Stocks off to a solid start

As expected, US indexes got off to a solid start after yesterday afternoon's rapid reverse.

The Dow Jones average was up 92 at 25,885 while the S&P 500 was 4 points firmer at 2,781.

On the fast-moving crypto-currency markets, Bitcoin was getting another bashing, trading at US$9,586, down more than a thousand dollars on the day.

“Bitcoin’s rout continued and the break below $10k marked an important breach of key technical and psychological levels. At last look the bulls are trying to stage a fightback at $9,800 but seem to be losing the battle. The move means we have seen a 50% fall from the December peak when it was threatening $20k,” noted Neil Wilson of ETX Capital.

“Having breached $10,000 the next real support is around $9600 before $9k comes into view, an old support that was the Nov 29/30 daily lows. A move to the $9,400 region would mark another important technical level ticked off as it would be a 61.8% retracement of the move from the September low from $3k to the December all-time high.” he opined.

“This bout of selling appears to have been sparked by a tightening of the regulatory noose on the wider cryptocurrency market.

“In addition to signals that South Korea and China may ban trading on crypto-currencies, we have heard comments from Russian leader Putin that the country will seek to regulate the market more tightly.

“This very much feels like a tipping point for Bitcoin and if the optimism really has gone the next leg lower could conceivably take us back to the narrow (for Bitcoin) range it traded Nov 21-24th, when it was bouncing around just above $8,000.”

On the equity markets, Aerohive Networks Inc (NYSE:HIVE) was the top faller on the NYSE, shedding more than a quarter of its value after its fourth quarter results.

It said it expects net revenue for the fourth quarter will come in at around US$37mln, having previously advised the market that it would come in somewhere between US$40mln and US$42mln.

“Following the change in our sales leadership at the end of our third quarter, we uncovered underlying sales execution issues which became fully apparent in the last month of the fourth quarter. We have taken actions to replace under-performing sales team members, and we believe that the new people we have been putting in place, combined with other actions, will enable us to capitalize on our improved product offering and exciting road-map in 2018,” said David Flynn, the president and chief executive officer of Aerohive.

Pre-market

Glamor stocks live by different rules, as indicated by Longbow Research's downgrade of Apple Inc (NASDAQ:AAPL) to 'neutral' from 'buy'.

Sales of the current generation of the company's flagship iPhone product will be “good”, but “good” just does not cut it for a stock with a stratospheric valuation.

The research house reckons Apple will shop fewer handsets than expected by the market in the current fiscal year.

The stock initially dipped on the downgrade but recovered to US$176.60 in pre-market trading, up 0.2% - though this was admittedly below the expected rise in the market overall – after of Bank of America Merrill Lynch weighed in and raised its price target from US$180 to US$200.

"We remain bullish on potential for cash repatriation, lower tax rates, and the potential for positive estimate revisions heading into 2019," the bank said of the iPhone maker, which is also something of a tax avoidance specialist.

Talking of tax avoidance specialists, results from investment bank Goldman Sachs Group Inc (NYSE:GS) topped expectations but the stock dipped after the company said it would take a tax hit.

Underlying earnings per share of US$5.68 were 77 cents higher than Wall Street had been expecting from the so-called “Vampire Squid” of Wall Street.

The group took a non-cash impairment charge of US$4.4bn relating to the tax reform legislation passed recently by Congress; the charge meant the group suffered a loss per share of US$5.51.

Revenue of US$7.83bn topped analysts' estimates of US$7.61bn.  

In pre-market trading, Goldman's stock was down 0.2%.

Bank of America Corp (NYSE:BAC), however, was up 0.1% after its fourth-quarter results.

Adjusted earnings per share came in two cents above expectations at 47 cents. Revenue of US$20.4bn was below expectations of US$21.49bn.

Ahead of the official market open, spread betting quotes indicated the S&P 500 would open at around 2,791, up 15 points, after US industrial output rose more than expected in December.

A 0.9% gain on the index represented the fourth monthly increase in a row.


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