U.S. Stocks Struggle to Hold Gains as Amazon Enters Bear Market; Litecoin, Binance Coin Lead Cryptos Higher

U.S. stocks traded mostly higher on Friday, as traders sifted through the latest stream of economic data. Shares of Amazon Inc. (AMZN) entered bear-market territory on Friday after providing light guidance during its Q4 earnings call.

Stocks Finish Mostly Higher

The large-cap S&P 500 Index drifted between gains and losses throughout the day, eventually settling 0.1% higher at 2,706.53. Gains were largely concentrated in energy and information technology shares. On the opposite side of the spectrum, the consumer discretionary component fell 1.8%.

A weak performance in communications services weighed on the Nasdaq Composite Index, which fell 0.3% to 7,263.87.

The Dow Jones Industrial Average held onto gains but finished well off session highs. The blue-chip index settled up 64.22 points, or 0.3%, at 25,063.89.

Amazon’s market cap swung below $800 billion on Thursday and officially entered a bear market after the company said it would likely boost investment in 2019. The online retailer also raised red flags about regulatory challenges in India, which could impact business. India has pushed through new regulations that will prevent foreign online retailers from selling to domestic markets through affiliates.

On Thursday, Amazon reported per-share earnings of $6.04 on revenue of $72.4 billion.

The CBOE Volatility Index, also known as the VIX, fell to its lowest level in almost four months. The so-called “fear index” edged down 2.6% to 16.14 on a scale of 1-100 where 20 represents the historic average.

Nonfarm Payrolls Surge

Stocks had initially pushed higher after government data showed a much bigger than expected rise in nonfarm payrolls. However, analysts later pointed out that the monthly hiring clip was likely distorted due to the government shutdown.

Employers added 304,000 workers to payrolls last month, the Department of Labor reported Friday. Analysts had expected a gain of 165,000. However, the December hiring clip, originally reported at 312,000, was revised down sharply to 222,000. Nevertheless, the U.S. economy appears to have emerged from the government shutdown on firm footing, alleviating concerns that the impasse would impact growth and business confidence.

Unemployment rose slightly to 4% in January from 3.9% the previous month, though this was caused by an increase in workforce participation. Average hourly earnings grew less than expected month-on-month, but came in at a robust 3.2% annually.

The good news didn’t end there. The University of Michigan’s consumer sentiment index strengthened to 91.2 in January, according to the final estimate. The Institute for Supply Management’s manufacturing PMI strengthened to 56.6 in January from 54.3 the month before. Meanwhile, construction spending climbed 0.8% in November, far exceeding estimates of 0.2%.

Crypto Markets Stabilize

The cryptocurrency market stabilized on Friday, as Litecoin (LTC) and Binance Coin (BNB) booked sizable advances. Litecoin added 5.2% to $33.21. BNB climbed 6.8% to $6.61.

Bitcoin (BTC), the leading digital currency by market cap, advanced 1% to $3,498.15. Its share of the overall market stood at 53.4%.

The total cryptocurrency market cap improved to $114.7 billion compared with a session low of $112 billion. Trading volumes dipped below $17 billion, setting the stage for a quiet weekend.

VanEck confirmed on Thursday that it had resubmitted its joint bitcoin ETF proposal with CBOE and SolidX. The announcement came about a week after the proponents withdrew their bid, citing a prolonged government shutdown in Washington. By resubmitting their application, VanEck and its partners have more time to convince the U.S. Securities and Exchange Commission (SEC) to approve their fund. More on the story: Weekly Recap: Crypto Winter Continues as NEM Foundation Crumbles, Bitcoin Falls 7.6% in January.

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