By Sue Chang and Ellie Ismailidou, MarketWatch
Twilio soars 73% in its trading debut
U.S. stocks bolted higher Thursday as investors awaited results
from the closely watched referendum to decide the U.K.'s membership
in the European Union.
Polls have shown a tight race between the "leave" camp and the
"remain" side but a pair of polls released earlier showed support
for "remain"
(http://www.marketwatch.com/story/ipsos-mori-brexit-poll-puts-remain-4-points-ahead-2016-06-23)
slightly ahead. Bookmakers also indicate a 76% probability of a
vote to remain in the EU.
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 gained 17 points, or 0.9%, to 2,103,
regaining the psychologically important 2,100 level. Financial and
materials stocks were leading the gains, up 1.7% and 1.4%
respectively. Utilities were in the red, down 0.3%.
The Dow Jones Industrial Average jumped 144 points, or 0.8%, to
17,926. Goldman Sachs Group Inc..(GS) rose 2.9%, leading the
gainers in the blue-chip gauge.
The Nasdaq Composite Index climbed 53 points, or 1.1%, to
4,886.
Global market moves on Thursday showed that "the 'remain' vote
is largely priced in," said Joe Higgins, managing director at TIAA
Global Asset Management.
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.
"A relief rally could ensue in the coming weeks, but substantial
upside is likely to be limited by the same factors that have been
weighing on the markets," said Randy Frederick, managing director
of trading and derivatives at Schwab Center for Financial
Research.
The U.S. market has been hemmed in by tepid corporate earnings
and uncertainties over the Federal Reserve's monetary policy.
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.
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, he added.
Meanwhile, the Fed is set to reveal how banks performed in
annual stress tests after the market's close which will impact how
financial shares trade on Friday.
The CBOE Volatility Index , which had spiked
(http://www.marketwatch.com/story/wall-streets-fear-gauge-rears-up-as-brexit-vote-approaches-2016-06-22)
to above 20 in the previous session on Brexit jitters, has eased
back to 18.07.
Stocks in Europe climbed, 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).
The dollar was lower against most other major currencies, with
the ICE dollar index down 0.3%, while Treasury yields rose to a
three-week high and 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.
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 2% after
the software company late Wednesday gave a downbeat guidance for
the year
(http://www.marketwatch.com/story/red-hat-slumps-after-announcing-quarterly-earnings-deal-to-buy-3scale-2016-06-22).
Bank of America Corp.(BAC) rose 2.7% 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).
Macy's Inc. (M) gained 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.
Barnes & Noble Inc.(BKS) jumped 8.7% 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.
Tesla Motors Inc.(TSLA) edged lower as investors mostly rejected
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) jumped 4.3%, 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) soared 73% in its
Thursday debut as a publicly traded company.
Sonic Corp.'s(SONC) results are expected after the close.
--Sara Sjolin contributed to this article.
(END) Dow Jones Newswires
June 23, 2016 13:45 ET (17:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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