Tax Reform Trips Early Rally; Intel Heads Dow, Clears Buy Point | Stock News & Stock Market Analysis

Stocks jumped at Wednesday’s open as markets awaited a final, procedural House vote on Congress’ massive tax overhaul package. Gains by Intel (INTC), FedEx (FDX) and Micron Technology (MU) also factored into early trade.

X The Dow Jones industrial average,the Nasdaq Composite and the S&P 500 all opened to gains of 0.3%. All three indexes traded just shy of new highs.

Senate approval of the GOP’s tax reform legislation early Wednesday gave markets some early lift, as a re-vote expected in the House later in the day was broadly seen as a technicality. Markets remained wary of the ongoing need for a budget agreement, without which federal offices would be required to shut down after Friday.

Real estate data continued to roll in, with the Mortgage Bankers Association reporting a 4.9% drop in total mortgage applications activity last week, putting the week 8% below last year’s level. Estimates for sales of existing homes in November are expected from the National Association of Realtors at 10 a.m. ET. The Energy Information Administration offers up its weekly oil inventories report at 10:30 a.m. ET.

Intel Clears Buy Point As FedEx, Micron Rise

Chipmakers were showing strong early action, as Intel headed the Dow, up 1.1%, although JPMorgan (JPM) and Goldman Sachs (UTX) also traded near the head of the list. Intel’s move followed news reports of a company memo in which Chief Executive Brian Krzanich declared the company was set to take more risks, as it boosts the amount of its revenue coming from growth markets, vs. its legacy PC business.

Intel’s gain sent just above a 47.40 buy point in a flat base.

Micron Technology leapt 5% at the open. The Boise, Idaho-based chipmaker reported a triple-digit surge in fiscal first-quarter earnings and a 71% revenue increase, easily topping analyst estimates. The stock ended Tuesday poised for a possible rebound from its 10-week moving average, which would offer a follow-on buying opportunity.

Among other chip-related stocks, Applied Materials (AMAT) rose 0.8% and Lam Research (LRCX) gained 2%.

Tesla (TSLA) shares dropped 0.8%, deepening Tuesday’s slide of more than 2%. The maker of battery-powered luxury cars received the largest order to date for its new autonomous tractor-trailer vehicles, a UPS (UPS) order for 125 trucks.

FedEx opened 3% higher after reporting strong fiscal second-quarter results late Tuesday. A 15% profit gain and a 9% rise in revenue topped analyst forecasts, and an increase in full-year earnings guidance beat expectations. FedEx shares are extended above a 220.09 buy point in a flat base.

November initial public offering Stitch Fix (SFIX) dived 14%, despite reporting better-than-expected fiscal first-quarter sales and earnings. The stock ended Tuesday 65% above its Nov. 17 IPO price.

Open source software leader Red Hat (RHT) dumped more than 3% in premarket action. The Raleigh, N.C.-based cloud play reported a solid third-quarter performance late Tuesday, and shares ended the session up 58% from a breakout in February.

Bitcoin Futures Mixed, Stocks Open Higher

Bitcoin dropped back to near the $17,000 level, after approaching $18,000 in early trade. Futures traded lower on both the CBOE and the CME.

Among bitcoin-related stocks, Riot Blockchain (RIOT)  gained 4%, after ending Tuesday with a 185% gain so far in December. Marathon Patent Group (MARA) posted a 2% gain. Bitcoin Trust (GBTC) stumbled 10% lower and (OSTK) also reversed losses to a 4% gain.

Longfin (LFIN), the IPO that launched Friday just after announcing it had acquired, a small lender using blockchain ledger accounting technology, made a sharp turn higher, surging 8%. The stock had opened at 5 on Friday, then soared to near 143 on Monday.


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Originally posted 2017-12-25 18:14:39.


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