Investors shrugged off the 2 p.m. ET release of minutes from the Federal Reserve's Dec. 12-13 meeting that ended with a new hike in short-term interest rates. Instead, they seemed focused on deploying more capital into stocks that appear to have further upside in 2018.
X The Nasdaq composite, a 1.5% winner on Tuesday, rose another 0.9% in late-afternoon trading on Wednesday and was virtually at session highs.
At 3:30 p.m. ET, the S&P 500 was up 0.6%; the Dow Jones industrial average continued to lag for a second straight session, but still rose more than 0.4%. At least nine of the 30 components of the Dow industrial average gained 1 point or more. IBM (IBM) paced the Dow with a 2.9% gain. Big Blue appears to be building a first-stage bottoming base; for now, the potential entry point is 162.61.
The S&P SmallCap 600 rose just 0.2%.
Volume is rising vs. the same time Tuesday on both exchanges, a clear sign that institutions seek to continue accumulating shares. On the Nasdaq, turnover is particularly higher.
Meanwhile, Apple (AAPL) continued its steady rise, begun when the stock showed a major change in character in January 2017. Exactly one year ago, the iPhone marketer staged a sound breakout from a first-stage cup with handle at 118.12. Since then, Apple has made at least three tests of support at its rising 50-day moving average and survived all three tests by rising into new all-time highs.
At its recent all-time high of 177.20, Apple has achieved a 50% gain since the breakout a year ago. With earnings expected to continue growing at a decent double-digit pace, there's no reason to doubt that the premier smartphone and digital device giant can continue to pad those gains.
A 100% gain from the 118.12 primary entry would send Apple to the 236 level. If Apple were to achieve that milestone, its market cap would reach $1.2 trillion (236 share price multipled by 5.09 billion shares outstanding).
Apple achieved a key turnaround in fiscal 2017 (ended in September that year) as earnings grew 11% to $9.21 a share, reversing from a 10% drop in FY 2016. Wall Street now sees earnings growth picking up in the current fiscal year, rising 24% to $11.46 a share on a 20% jump in revenue to $274.28 billion.
The 20% rise would mark the second biggest year-over-year revenue jump in six years. In FY 2015, the top line increased 28% to $233.72 billion.
Meanwhile, interest in Bitcoin appears to remain solid, even amid intensifying competition for dollars going into alternative digital currencies. The Bitcoin Investment Trust (GBTC) rallied 3% to 2,334, one day after testing support at the 2,000 level.
At 33% below its all-time peak of 3,522, the ETF is now in base-building mode.
Notice on a daily chart how Bitcoin Investment continues to keep a large air pocket above the 50-day moving average, a bullish sign. Average volume, meanwhile, continues to rise and is now at 133,000 shares a day.
Elsewhere in the stock market today, IBD's Stocks On The Move table is showing a plethora of tech, energy and consumer-oriented stocks with strong IBD Ratings and rising in heavy volume. This table is a good source of ideas for your watch list. Learn how to spot key chart patterns, such as the cup with handle and the flat base, to identify the right time to buy a stock.
Ideally, you want to buy a market leader on strength, rising in heavy volume and busting through prior resistance levels. Such action signals that demand from mutual funds, banks, hedge funds, insurers, pension funds, college endowments and the like is far outweighing the supply of shares being offered by willing sellers.
Keep an eye on the downside portion of Stocks On The Move as well; stocks that make this screen are showing big declines in unusually heavy turnover, and thus may be signaling a future correction in the works.
For instance, Dominion Energy (D) is making the Stocks On The Move screen to the downside after gapping down more than 4% to 77.21 in six times its normal turnover. The electric and gas utility had recently fallen below its 50-day moving average last month and now has plunged below the long-term 200-day moving average. Dominion, however, has shown in recent years a capacity to recover after taking out the 200-day line.
The Dow utility average, which slid nearly 1.1% on Tuesday, lopped off another 1.2% on Wednesday.
Meanwhile, the biggest decliner on a points basis among the 30 stocks in the Dow Jones industrial average is Goldman Sachs (GS), off 2.12 to 253.55. However, volume is below average, and so the Wall Street investment bank does not appear in IBD's Stocks On The Move.
Goldman Sachs has thin gains of just 2% after clearing a 247.84 buy point in a long saucer with handle on Nov. 30.
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