Market Update: S&P 500 Notches Third Straight Rally on Earnings; Cryptocurrencies Hit $340 Billion
U.S. stocks finished mostly higher on Wednesday, as earnings optimism lifted the S&P 500 Index and Nasdaq to their third consecutive daily advance. Meanwhile, cryptocurrencies resumed their uptrend after a two-day pause as bitcoin returned above $8,000 and bitcoin cash surged double-digits.
Stocks Finish Mostly Higher
Two out of the three major U.S. indexes notched gains, with the S&P 500 Index edging up 0.1% to 2,708.64.
Four of 11 sectors contributed to the rally, with energy shares jumping 1.6%. Other commodity-sensitive sectors such as materials and industrials also reported firm gains.
The biggest laggards on Monday included consumer staples and financials, which fell 0.9% and 0.4%, respectively.
The technology-laden Nasdaq Composite Index rose 0.2% to finish at 7,295.24.
Meanwhile, the Dow Jones Industrial Average fell 38.56 points, or 0.2%, to close at 24,748.07. The blue-chip index is coming off two straight sessions of 200-point gains.
A measure of implied volatility known as the CBOE VIX rose 2.3% to 15.60, which was still well below the historic average near 20. Volatility has been creeping lower in anticipation of strong quarterly earnings from U.S. firms.
The first round of Q1 reports have not disappointed, with major banks and technology companies reporting above-trend growth. Analysts at FactSet are forecasting the strongest quarter of year-over-year growth since 2011.
Cryptos Extend Rally
After initial hesitation, the cryptocurrency market rose on Wednesday as the end of tax season offered temporary reprieve to volatility.
The total market cap for all cryptos in circulation reached a high of $342 billion, according to CoinMarketCap. That was a gain of $19 billion on the day and the highest in almost a month.
Bitcoin cash (BCH) was the biggest gainer percentage-wise, climbing nearly 16% to $880 per coin on the major exchanges. Original bitcoin (BTC) advanced 3.4% to $8,190. However, its total share of the market fell below 41%.
Other major cryptocurrencies also contributed to the rally, with Ethereum adding 3.3% to $521 and Ripple XRP gaining 7.6% to settle at $0.71.
There was no immediate catalyst for the recovery, although tax relief may have played a role. The IRS extended its deadline for U.S. tax filing by one day after servers overloaded on deadline day.
Americans cryptocurrency holders may have owed as much as $25 billion in capital gains taxes, according to Tom Lee of Fundstrat Global Advisors. However, data from Credit Karma showed that less than 100 of its 250,000 filers have reported cryptocurrency-related capital gains.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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