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Stocks still buoyant as bitcoin retreats from all-time high

·3-min read
Bitcoin continues to break records as it creeps towards $50,000 but observers have warned about its volatility

Wall Street stocks finished a solid week at all-time highs Friday amid anticipation of more US fiscal stimulus, while bitcoin slipped back from record highs to below $48,000.

After a positive day on European bourses, all three major US equity indices finished at all-time highs, with the S&P 500 gaining 0.5 percent to end up 1.2 percent for the overall week.

Markets in New York meandered through much of the week, but generally drifted higher following mostly good corporate earnings. Much of the economic data has been weaker, but investors view that dynamic as lending further momentum to President Joe Biden's stimulus proposal.

"We can see that Biden wants to move forward with his package quickly," said Gregori Volokhine, president of Meeschaert Financial Services. "We can also see more progress on coronavirus vaccines."

However Oxford Economics said approval of that plan was on hold as lawmakers debate whether to convict former president Donald Trump for his role in the insurrection at the US Capitol last month.

"As the fate of the proposal remains on hold, critics and advocates are debating the merits of its size and composition," Oxford Economics said.

"President Biden, however, appears less willing to compromise on some key issues, indicating that the fiscal aid, which can be passed with a simple majority in the Senate via the budget reconciliation process, will be larger than expected even a few weeks ago."

Bitcoin had touched a new high of $48,930 in Asian trade after MasterCard and US bank BNY Mellon moved Thursday to make it easier for people to use the cryptocurrency. But as of around 2200 GMT on Friday it was trading about $1,000 below that peak.

"Bitcoin had a great week" thanks in part to the institutional backing, OANDA analyst Edward Moya said, but "the key for bitcoin's path higher is to win over more corporate endorsements."

"Massive weekend moves" nevertheless remain possible for the historically volatile cryptocurrency, he added.

Elsewhere, oil prices were on the up even as uncertainty persists over how far demand will recover from last year's plunge.

With the newly-vaccinated eager to travel, "the crude demand outlook looks like it could get its best-case scenario as Americans who want a Covid vaccine will be able to get it by April," OANDA's Moya said.

With most of Asia closed for the Lunar New Year holiday, business was limited. Tokyo and Wellington both fell, while Sydney was also hit by news of snap virus lockdown in Melbourne.

- Key figures around 2200 GMT -

New York - Dow: UP 0.1 percent at 31,458.40 (close)

New York - S&P 500: UP 0.5 percent at 3,934.83 (close)

New York - Nasdaq: UP 0.5 percent at 14,095.47 (close)

London - FTSE 100: UP 0.9 percent at 6,589.79 (close)

Frankfurt - DAX 30: UP 0.1 percent at 14,049.89 (close)

Paris - CAC 40: UP 0.6 percent at 5,703.67 (close)

EURO STOXX 50: UP 0.7 percent at 3,695.61 (close)

Tokyo - Nikkei 225: DOWN 0.1 percent to 29,520.07 (close)

Shanghai - Composite: Closed for a holiday

Hong Kong - Hang Seng: Closed for a holiday

Euro/dollar: FLAT at $1.2130

Dollar/yen: UP at 104.91 yen from 104.75 yen

Pound/dollar: UP at $1.3845 from $1.3816

Euro/pound: DOWN at 87.50 pence from 87.79 pence

Brent North Sea crude: UP 2.1 percent at $62.43 per barrel

West Texas Intermediate: UP 2.1 percent at $59.47