By Sue Chang and Ellie Ismailidou, MarketWatch
Twilio soars 87% in its trading debut
U.S. stocks bolted higher Thursday, with all three indexes
rallying, as investors predicted that the U.K. will choose to
remain in the European Union in a closely watched referendum.
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 while 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 19 points, or 0.9%, to 2,104,
regaining the psychologically important 2,100 level. Financial and
materials stocks were leading the gains, up 1.6% and 1.4%
respectively.
The Dow Jones Industrial Average jumped 157 points, or 0.9%, to
17,937. Goldman Sachs Group Inc..(GS) rose 2.6%, leading the
gainers in the blue-chip gauge.
The Nasdaq Composite Index climbed 54 points, or 1.1%, to
4,887.
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)
Although the U.K. maintaining its membership in the EU is better
for a sluggish stock market, it may not be the panacea that
investors have been seeking, according to analysts.
"Investors will remain uncertain about the state of the economy
and politics will continue to bring emotions into investing.
Ultimately, investors are concerned about more than this singular
event," Albert Brenner, director of asset allocation strategy at
People's United Wealth Management, said in a note.
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 18.17.
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 0.2%, 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 1.8%
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 2.8% 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 1.8% 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 8.1% 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) fell 0.8% 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 3.3%, 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 87% in its
debut as a publicly traded company.
--Sara Sjolin contributed to this article.
(END) Dow Jones Newswires
June 23, 2016 15:35 ET (19:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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