U.S. Stocks Cling on to Gains as Cryptocurrencies Plunge Anew

U.S. stocks extended their rally to five sessions on Friday, though gains continued to moderate as a partial government shutdown in Washington threatened federal employee wages. Cryptocurrencies led by bitcoin plunged anew in the latter half of the week, undoing weeks of steady progress.

Stock Rally Continues

Stocks opened lower on Thursday but reversed course later in the session, with all three major benchmarks closing in positive territory. The Dow Jones Industrial Average rose 122.80 points, or 0.5%, to close at 24,001.92. The index was down as much as 176 points in the morning. Boeing Co (BA) and Caterpillar Inc. (CAT) were the day’s best performers, rising 2.7% and 1.9%, respectively.

The broad S&P 500 Index climbed 0.5% to 2,596.63, with ten of 11 primary sectors reporting gains led by utilities and industrials shares.

The technology-focused Nasdaq Composite Index advanced 0.4% to 6,986.07.

Government Shutdown Continues

President Donald Trump has once again threatened to declare a national emergency if Congress refuses to fund his proposed wall along the U.S.-Mexico border. Negotiations between Trump and Democrats broke down Wednesday after Nancy Pelosi refused to consider border funding as part of a new deal to reopen government.

The partial government shutdown looks poised to enter its third week with an estimated 800,000 federal employees scheduled to miss their first paycheck on Friday. To mitigate the impact of a prolonged shutdown on employees and households, the Trump administration has agreed to let the IRS pay out tax refunds once filing season begins. This will allow hundreds of billions of dollars to flow to households in the coming months.

Cryptos Crash Again

A period of relative stability for cryptocurrencies came to an abrupt end on Thursday, as bitcoin and the major altcoins posted huge losses. The combined value of all cryptocurrencies plunged by $16 billion to $122 billion, with the majors losing anywhere between 8% and 16%. Read more: Crypto Winter and the Fed?

At the time of writing, the crypto market was worth $123.3 billion on trading volume of $23.2 billion.

The selloff was instigated by bitcoin, the largest and most influential cryptocurrency, after it fell 5% in the span of an hour. BTC would go on to lose more than 9% by midday.

Ethereum plunged 14.4% to $129 and a market cap of $13.5 billion. This allowed XRP to reclaim the no. 2 spot in the market-cap rankings despite falling 9%.

Bitcoin cash, EOS, Stellar and Litecoin were each down more than 10% at the time of writing. Tron also faced a sharp reversal after surging to five-month highs on Wednesday.

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 Hacked.com and Contributor to CCN.com, 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