Market Update: U.S. Stocks Rise on Earnings Boost; Cryptocurrency Trade Volumes Top $38 Billion

U.S. stocks advanced Tuesday, with the S&P 500 closing in on five-and-a-half month highs as investors rejoiced in what appears to be another upbeat earnings quarter for Wall Street.

Stocks Rise

Shares of energy and materials stocks propelled the S&P 500 Index higher on Tuesday. The benchmark gauge rose 0.5% to 2,820.40. Nine of 11 primary sectors finished in positive territory.

Dow industrials shot up 197.65 points, or 0.8%, to 25,241.94. United Technologies Corp (UTX), Chevron Corp (CVX) and Johnson & Johnson (JNJ) were the strongest contributors, rising at least 2.1% each.

The technology-heavy Nasdaq Composite Index bucked the general uptrend, falling 0.1% to 7,833.65.

Positive returns on Wall Street have been largely attributed to a robust earnings season. As of Friday, the earnings growth rate of S&P 500 companies was 20.8%.

Economic Data in Focus

The U.S. economy expanded at a steady pace in July, as factory output gained momentum in spite of apparent trade risks.

Markit’s flash U.S. Composite purchasing managers’ index (PMI) edged down this month to 56.2 from 56.5 in June. The Composite gauge tracks services and manufacturing activity.

“The July survey data indicate that the US economy sustained strong growth momentum after what looks to have been a solid second quarter, representing a good start to the second half of 2018,” Chris Williamson, Markit’s chief economist, said in a statementr. Although down from June, the July flash PMI is in line with the average for the second quarter and indicative of the economy growing at an annualized rate of approximately 3%.”

Investors are gearing up for an active second half of the week headlined by U.S. durable goods orders and second-quarter gross domestic product (GDP). The preliminary GDP estimate is forecast to show annualized growth of 4% between April and June compared with just 2% growth in the first three months of the year.

Bitcoin Inspires Broad Crypto Rally

The crypto bulls were back in action Tuesday after bitcoin cleared $8,000 for the first time in two months. In the process, daily trade volumes spiked above $38 billion for the first time since January, one of the more tangible signs that the market had turned the corner.

The combined value of cryptocurrencies in circulation reached a high of $301 billion, with bitcoin accounting for more than 47% of the whole. Of the $15 billion added to the digital currency market on Tuesday, bitcoin accounted for $9 billion.

Bitcoin has been showing signs of life ever since prices bottomed below $5,800 in late June. The largest cryptocurrency by market value defended $6,000 in the first half of July, crossed $7,000 last week and surpassed $8,000 on Tuesday.

Stocks with exposure to cryptocurrencies and blockchain technology also rose on Tuesday, with the likes of Riot Blockchain (RIOT), HIVE Blockchain (HIVE) and Marathon Patent Group (MARA) putting up large 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.

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