Apple (AAPL) is helping keep the rally in big cap techs alive, rising 0.5% to 172.60 and slowly stretching gains from multiple buy points this year.
X Apple, which is acquiring the popular song-identifying app Shazam, is now investing $390 million in optical communications gear expert Finisar (FNSR) to bulk up on its manufacturing capabilities.
The Dow Jones industrial average member also helped the 30-stock blue-chip index stage a gain of more than 0.5%, leading the other key averages. The Dow showed at least nine components, including Apple and global construction play Caterpillar (CAT), gaining 1 point or more. Cat recently propelled out of a tight short consolidation, offering an alternative buy point at 140.54.
Caterpillar is, like Apple, another example of a classic earnings turnaround for 2017. The earth moving and building equipment giant has fired up its profit growth with earnings rising 100%, 37% and 129% vs. year-ago levels in the past three quarters. That ended an eight-quarter drought in profits. The Street sees Q4 earnings rising 108% to $1.73 a share.
The Nasdaq composite and the S&P 500 rose around 0.1% to 0.2% ahead of an expected rise in the fed funds rate — what the Federal Reserve charges banks on overnight loans — to a 1.25%-1.50% target range.
It's likely to be the fifth bump in the cost of money since the U.S. central bank raised the fed funds rate by a quarter point to a 0.25%-0.5% range in December 2015.
Bitcoin Investment Trust (GBTC), meanwhile, staged a negative reversal after flying to as high as 2,568 intraday, up almost 13% on the day and good for a 168% gain since the Bitcoin-tracking ETF broke out of a very deep cup with handle at 958.10 last month.
Bitcoin Investment Trust, which has seen its average volume surge by more than 50% over the past several weeks, is now more than 300% above its long-term 200-day moving average, currently near 555.
Those with a big cushion and strong conviction in the alternative currency may decide to hold and give the exchange traded fund more potential room to grow. Short-term traders, can treat Wednesday's action as a sell signal.
In the stock market, strength in RV maker, shoe, toy, consumer electronics and fiber optic firms offset a decline in many oil-related industry groups.
Among the top 20 industry groups ranked each day by IBD for six-month relative performance, mortgage services, mobile home and recreational vehicle, construction and mining equipment, apparel retail, automation machinery, home furnishings retail and desktop software firms rallied 1% or more. (Track the day to day changes by going to Data Tables within the Stock Lists section of Investors.com.)
WTI near-term crude oil futures fell more than 0.8% to $56.66 a barrel.
Returning to Apple, the iPhone giant originally started its market-leading move in 2017 with a Jan. 6-9 breakout from a first-stage cup with handle at 118.12. Gains have approached 50%. Along the way, notice on a weekly chart how Apple never got far below the key 10-week moving average.
The stock also continues to plot a series of higher highs and higher lows.
Earnings and revenue estimates look healthy going into fiscal 2018, which ends in September next year. Analysts estimate earnings to rise 25% to $11.47 a share, which would be the biggest jump since a 43% leap in FY 2015, on a 20% revenue boost to $274.28 billion.
Banks continued to rally.
State Street (STT) broke out, rising 2% and briefly surpassing a 100.09 entry in a cuplike flat base. Watch to see if the stock's relative strength line, painted in blue in an IBD chart, can continue to rise and move into new high ground.
The Boston-based asset manager and custodian banking giant sports a decent EPS Rating of 88, as seen in IBD Stock Checkup.
A few market leaders, including a few recent new issues, are facing key tests of support at the 50-day or 10-week moving average. They include PayPal (PYPL), Square (SQ), Broadcom (AVGO), and Universal Display (OLED).
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