Wall St marches ahead as Britain votes on EU
Thu Jun 23 2016
Nikki Bailey (1073 articles)

Wall St marches ahead as Britain votes on EU

The three major U.S. stock indexes recorded their biggest percentage gains in a month on Thursday as Britain seemed to swing toward remaining in the European Union, a scenario that would avert a possible financial crisis.

Markets across the globe have been rattled over the past two weeks as investors speculated about the consequences of Britain’s exit from the European union, including the unraveling of the bloc.The “Remain” camp has found 52 percent favor, according to an Ipsos MORI poll conducted on Tuesday and Wednesday. The final result of the referendum will be known on Friday.

U.S. markets also took solace in Fed Chair Janet Yellen’s two-day testimony this week when she expressed optimism about the economy and downplayed the chances of a recession this year.

“Regardless of the outcome in the UK, we will see a relief rally in the U.S. today and tomorrow,” said Mohannad Aama, managing director, Beam Capital Management in New York.

“I think we’ll continue to go up tomorrow even if a “Leave” vote prevails because there’s a lot of money in the sidelines … and that will be routed to safer havens and that includes U.S. stocks.”

The sterling hit a year-high on Thursday while gold, which had gained favor amid uncertainty in the past month, fell to a two-week low.

Oil prices rose despite a smaller-than-expected draw on U.S. crude as appetite for risky assets increased on better odds for Britain to remain in the EU. [O/R]

CBOE Volatility Index .VIX, the market’s measure of turbulence, fell 13.42 percent to 18.33, compared to its long-term average of 20.

At 10:48 a.m. ET (1448 GMT), the Dow Jones Industrial Average .DJI was up 130.98 points, or 0.74 percent, at 17,911.81.

The S&P 500 .SPX was up 15.09 points, or 0.72 percent, at 2,1000100.54.

The Nasdaq Composite .IXIC was up 37.82 points, or 0.78 percent, at 4,871.13.

The major S&P sectors were led by a 1.44 percent rise in the financials index .SPSY. JPMorgan (JPM.N) and Citigroup (C.N) were the top gainers in the sector, which had only three stocks in the red.

Utilities .SPLRCU were down 0.15 percent.

Markets were also buoyed by data that pointed to a resilient labor market. The number of Americans filing for unemployment benefits fell last week to a near 43-year low.

Micron Tech (MU.O) jumped 9 percent to $ 13.86 after Susquehanna raised rating to “positive” from “neutral”. The stock was the biggest percentage gainer among S&P components.

Macy’s (M.N) rose 4.7 percent after Terry Lundgren said he would step down as CEO next year.

Advancing issues outnumbered decliners on the NYSE by 2,442 to 426. On the Nasdaq, 2,077 issues rose and 508 fell.

The S&P 500 index showed 41 new 52-week highs and one new low, while the Nasdaq recorded 54 new highs and 13 new lows.


(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian)

Nikki Bailey

Nikki Bailey

Nikki Bailey reports on US Stocks. She covers also economy and related aspects. She has been tracking US Stock markets for several years now. She is based in New York