By Ellie Ismailidou and Sara Sjolin, MarketWatch
Pound touches 2016 high as the Brits head to vote
U.S. stocks rose on Thursday as investors wager that the U.K.
will vote to remain in the European Union in a closely watched
referendum.
A fall in U.S. jobless claims
(http://www.marketwatch.com/story/jobless-claims-tumble-to-8-week-low-of-259000-as-labor-market-stays-strong-2016-06-23)to
an eight-week low, indicating strength in the labor market, also
boosted sentiment.
The S&P 500 index rose 15 points, or 0.7%, regaining the
psychologically important 2,100 level, with nine of its 10 sectors
in positive territory. Financial and materials stocks were leading
the gains, up 1.4% and 1.2% respectively. Utilities were in
negative territory, down 0.2%.
The Dow Jones Industrial Average jumped 128 points, or 0.7%, to
17,909. Goldman Sachs Group Inc..(GS) up 1.9%, led gainers in the
blue-chip gauge.
The Nasdaq Composite Index climbed 36 points, or 0.8%, to
4,869.
Among stock movers, Macy's Inc. (M) gained 4.2% after announcing
that Jeffrey Gennette will succeed Terry Lundgren as chief
executive officer
(http://www.marketwatch.com/story/macys-announces-ceo-succession-plan-2016-06-23)
in the first quarter of 2017.
The rebound for stocks comes after all three benchmarks ended
lower Wednesday
(http://www.marketwatch.com/story/us-stock-futures-in-holding-pattern-with-one-day-to-go-before-brexit-vote-2016-06-22)following
the release of a poll that gave those favoring an exit from the EU,
dubbed Brexit, gaining a statistically insignificant advantage.
More recently, a pair of polls released after the U.S. market's
closed, as well as an Ipsos Mori phone poll released Thursday
morning showed support for "remain"
(http://www.marketwatch.com/story/ipsos-mori-brexit-poll-puts-remain-4-points-ahead-2016-06-23)
slightly ahead. A Populus online survey also put the "stay" camp
ahead at 55%.
Global market moves on Thursday showed that "the 'remain' vote
is largely priced in," said Joe Higgins, managing director at TIAA
Global Asset Management, pointing to global stocks rallying, while
Treasury yields rose to a three-week high, gold tumbled and the
British pound jumped
(http://www.marketwatch.com/story/pound-touches-6-month-high-with-brexit-vote-in-focus-2016-06-23)to
its strongest level in six months.
In that sense, if Britain votes to stay it could "feel
anticlimactic" in global markets whereas if the Brexit vote wins,
volatility should spike, Higgins said.
Polls have shown a tight race between the "leave" camp and the
"stay" side. Bookmakers, however, having been showing a 76%
probability of a vote to remain in the EU.
Read:Wall Street's 'fear gauge' rears up as Brexit vote
approaches
(http://www.marketwatch.com/story/wall-streets-fear-gauge-rears-up-as-brexit-vote-approaches-2016-06-22)
Broadcasters won't be conducting exit polls, so investors will
likely have to wait for the actual results to trickle out overnight
and during the morning London time. The final result is expected
around breakfast time in the U.K., or some time around 2-3 a.m.
Eastern Time.
Read:When will we know the result of the Brexit vote?
(http://www.marketwatch.com/story/when-will-we-know-the-result-of-the-brexit-vote-2016-06-21)
"Polls tell us it's too close to call, but the hot money is most
definitely on the status quo and another rally to end the week,"
said Lee Wild, head of equity strategy at stockbroker Interactive
Investor, in a note.
"However, even if 'remain' wins, the party may not last. It's
only a matter of time before investors remember lackluster global
economic growth, the slowdown in China and threat of Donald Trump
making it to the White House," Wild said.
Meanwhile, financial stocks were buoyed
(http://www.marketwatch.com/story/us-financial-shares-rally-as-expecations-mount-for-uk-to-stay-in-eu-2016-06-23)by
the climb in Treasury yields, as rising yields are traditionally
viewed as boosting bank profitability. Analysts thought that if the
U.K. decides in favor of continued EU membership, it will help to
eliminate global uncertainties which will lead to higher bond
yields.
Still, there could be "some bargain hunting" in the increased
appetite for financials, said Michael Arone, chief investment
strategist at State Street Global Advisors.
The sector is trading at a significant discount to the broader
market, as expectations for interest-rate hikes have recently
declined, Arone added.
Meanwhile, on Thursday after the close, the Federal Reserve is
set to reveal how banks performed in annual stress tests.
Stocks in Europe rallied as voters headed to the polls, while
Asia closed mixed
(http://www.marketwatch.com/story/asia-markets-remain-quiet-ahead-of-brexit-vote-2016-06-22).
The pound jumped to a six-month high
(http://www.marketwatch.com/story/pound-touches-6-month-high-with-brexit-vote-in-focus-2016-06-23)after
the Ipsos-Mori poll pointed to a "stay" win.
The dollar was lower against most other major currencies, with
the ICE dollar index down 0.4%, while oil prices moved higher
(http://www.marketwatch.com/story/oil-prices-move-higher-on-optimism-over-brexit-vote-2016-06-23).
Other economic news: A reading of manufacturing sentiment
(http://www.marketwatch.com/story/june-markit-flash-manufacturing-pmi-rebounds-from-weak-may-reading-2016-06-23)rebounded
in June from the weakest reading in six-and-a-half years in May,
according to data from Markit released Thursday.
Meanwhile, new-home sales declined
(http://www.marketwatch.com/story/new-home-sales-decline-6-to-551000-annual-pace-in-may-2016-06-23)in
May, an expected pullback after an outsize jump in April.
After the markets close, Dallas Federal Reserve President Rob
Kaplan will give a speech in New York at 7 p.m. Eastern.
Movers and shakers: Shares of Red Hat Inc.(RHT) dropped 4.6%
after the software company late Wednesday gave a downbeat guidance
for the year
(http://www.marketwatch.com/story/red-hat-offers-downbeat-guidance-for-the-year-2016-06-22-174854711).
Shares of Bank of America Corp.(BAC) rose 2.14% after sources
said the bank is moving closer to settle a case with U.S.
regulators
(http://www.marketwatch.com/story/bank-of-america-said-to-be-near-sec-settlement-for-up-to-450-million-2016-06-22).
Barnes & Noble Inc.(BKS) jumped 6.3% after the bookstore
late Wednesday said its loss widened during the final quarter
(http://www.marketwatch.com/story/barnes-noble-widens-losses-but-outlook-improves-2016-06-22)
of its fiscal year.
Accenture PLC(ACN) lost 1.6% despite the fact that the business
consulting company beat fiscal third-quarter revenue expectations
(http://www.marketwatch.com/story/accentures-stock-gains-after-revenue-beats-expectations-2016-06-23),
while matching profit forecasts.
Tesla Motors Inc.(TSLA) lost 0.8% as investors continued to
react to its explanation
(http://blogs.marketwatch.com/thetell/2016/06/22/elon-musk-explains-teslas-solarcity-offer-live-blog/)
for its surprise SolarCity Corp. (SCTY) bid.
BlackBerry Ltd.(BB.T) rose 2%, shaking off weak earnings
results,
(http://www.marketwatch.com/story/blackberry-loss-widens-as-revenue-tumbles-2016-06-23)
while cloud communications company Twilio(TWLO)priced its IPO above
the expected range
(http://www.marketwatch.com/story/twilio-prices-ipo-at-15-a-share-2016-06-22).
Sonic Corp.'s(SONC) results are expected after the close.
(END) Dow Jones Newswires
June 23, 2016 10:58 ET (14:58 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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