Market Update: Tech Stocks Lead Wall Street from the Abyss

U.S. stocks rose on Friday, with the S&P 500 snapping its longest losing streak in nearly two years on the back of technology and communications companies.  The cryptocurrency market was little changed after Thursday’s sharp retreat as bitcoin found stability near $6,300.

Stocks Mount Modest Comeback

All of Wall Street’s major indexes booked gains in the final session of the week. The large-cap S&P 500 Index advanced 1.4% to 2,767.13, with information technology and communications services leading the way higher. Tech shares spiked 3.2% on average.

The Dow Jones Industrial Average climbed 287.16 points, or 1.2%, to 25,339.99. The blue-chip index plunged more than 1,300 points on Wednesday and Thursday combined.

The Nasdaq Composite Index outperformed its peers on Friday, gaining 2.3% to 7,496.89.

A measure of implied volatility known as the CBOE VIX pivoted sharply lower on Friday. The so-called “fear index” settled down 14.7% at 21.31 after hitting a session high of 26.80. VIX spiked by a combined 56.3% in the last two sessions en route to fresh six-month highs.

Earnings Season Underway

Corporate earnings season began in earnest Friday with a trio of Wall Street banks reporting third-quarter results. JPMorgan Chase & Co (JPM), Wells Fargo & Co (WFC) and Citigroup Inc. (C) all reported rising profits.

Wall Street is coming off back-to-back quarters of stellar earnings growth thanks to a synchronized global recovery and corporate tax cuts at home. It remains to be seen whether U.S. firms can withstand the latest turmoil engulfing emerging markets like Turkey, South Africa and Argentina. The International Monetary Fund (IMF) earlier this week downgraded it outlook on global growth, citing trade risks as the biggest barrier moving forward.

U.S. companies are projected to report a blended earnings growth rate of 19.1% for Q3 2018, according to FactSet, a financial research firm. If that estimate holds, it would mark the third highest earnings appreciation since Q1 2011.

Cryptocurrency Market Treads Water

Cryptocurrencies stemmed further declines on Friday, with the total market cap holding above $200 billion.  XRP was one of the fastest to recover from Thursday’s rapid selloff, gaining 16% through the Asian session. By the afternoon, the XRP price was up a mere 3% over 24 hours to trade at $0.423, according to CoinMarketCap.

Bitcoin posted a daily high of $6,353.40 on Bitfinex after falling to the low $6,200 region during the prior session. The leading digital currency currently sits just north of $6,300 on trade volumes of roughly $4.2 billion.

The market-wide selloff on Thursday appears to have been driven by technical trading and the loss of declining appetite for digital assets following Bitfinex’s sudden freeze on fiat deposits earlier this week. The exchange, which is the world’s fourth largest based on adjusted volume, saw its daily turnover drop by nearly 50%. This comes despite a noticeable uptick in daily trade volumes across the entire market.

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.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi