Dow and S&P 500 Near Record Highs... Bitcoin Rally's 'Gyeotbul Effect'

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The major indices of the New York stock market showed an upward trend based on strong corporate earnings and the bullishness of Bitcoin.

On the 20th (local time), the Dow Jones Industrial Average rose 152.03 points (0.43%) to close at 35,609.34, the S&P 500 index increased by 16.56 points (0.37%) to 4,536.19, and the Nasdaq index fell 7.41 points (0.05%) to close at 15,121.68.

The Dow index hit an all-time high during the session, and the S&P 500 index also rose for six consecutive days, closing just 0.2% shy of its all-time high.

The Nasdaq index closed slightly lower as the 10-year Treasury yield rose to 1.67% during the session.

The major indices have shown continuous strength since the start of earnings announcements, and the rise in Bitcoin has further stimulated risk asset appetite, sustaining the upward momentum. Bitcoin prices surpassed $66,000 during the session, setting a new all-time high.

Thomas Lee, partner at Fundstrat, said, "The Bitcoin rally is a sign that the risk asset investment environment has recovered," and forecasted that the S&P 500 index will rise more than 6% by the end of the year. Lee raised his year-end S&P 500 target by 100 points to 4,800.

The earnings season leader on this day was Verizon, the largest US telecom company. Verizon rose 2.4%, recording the largest gain among Dow components amid evaluations of better-than-expected earnings.

Netflix, which reported earnings after the previous day's close, saw its stock fall about 2%. Although new subscribers increased by 4.4 million, exceeding expectations due to the Squid Game effect, Deutsche Bank's assessment that this growth was already priced in dragged the stock down.

United Airlines also reported quarterly earnings exceeding expectations after the previous day's close, but its stock fell about 0.6%.

Novavax, a COVID-19 vaccine manufacturer, dropped 14.76% following reports of significant difficulties in vaccine production. The intraday maximum decline exceeded 20%.

Automaker Ford surged 4% thanks to Credit Suisse raising its target price by 30%.

Location-based service provider Pinterest rose 12.7% amid reports of a potential acquisition by payment service company PayPal. PayPal's stock fell 4.9%.

Tesla announced record quarterly earnings and sales after the market close but was down about 0.9% in after-hours trading.

According to Earnings Scout data, among the S&P 500 companies that have reported earnings so far, 86% have exceeded expectations. The average third-quarter net profit of the companies announced so far is about 35% higher than the same period last year.

WTI crude oil prices rose 1.1% to $83.87 per barrel on news of inventory declines. WTI has risen for five consecutive days, reaching its highest level in seven years.

It is analyzed that the unexpected drop in weekly crude oil inventories reported by the US Energy Information Administration (EIA) stimulated oil prices.