Stocks around the globe rallied Monday as fears of a Brexit abated. Investors shifted from risk-off to risk-on strategies, selling gold and government bonds and buying stocks.
The Dow Jones Industrial Average almost erased last week’s 1.1% drop, but the S&P 500 jumped out of the gate only to give back some of the gains in the final hour of trading. However, all sectors of the S&P 500 closed in the black except safe-haven utilities. Energy was one of the leading groups, up 0.9%, as crude oil rallied 2.9% to $49.37 a barrel.
Gold lost 0.2% at $1,290 an ounce, and the yield on the benchmark 10-year Treasury note rose to 1.67% from 1.62% on Friday as bonds fell.
With the U.K. expected to remain in the EU, the British pound jumped 2.4% against the U.S. dollar to $1.47. The euro was up 0.3% against the greenback at $1.1312.
At Monday’s close, the Dow Jones Industrial Average gained 130 points at 17,805, the S&P 500 rose 12 points to 2,083, the Nasdaq advanced 37 points to 4,837, and the Russell 2000 was up 13 points at 1,158.
The NYSE Composite’s primary exchange traded 909 million shares with total volume of 3.4 billion. The Nasdaq crossed 1.8 billion shares. On the Big Board, advancers outpaced decliners by 3.3-to-1, and on the Nasdaq, advancers led by 2.7-to-1. Block trades on the NYSE fell to 5,070 versus 7,533 on Friday, which was an options expiration day.
The iShares Russell 2000 Index (ETF) (IWM) closed on the low of the day with an open gap at $114.92 to $115.30. Sellers tried to close the gap in the final moments of trading but failed.
This is poor tape action, especially after the failure to penetrate the resistance line at $119. Support rests first at the 50-day moving average at $113.13, and then the major support line at $112.
Conclusion
Traders despise late-day failures like Monday’s open gap in IWM. However, the gap may close at today’s opening, and then we will see who has the greater advantage, the bulls or the bears.
As Yogi Berra said, “It ain’t over till it’s over.” And we won’t know — and shouldn’t guess — who the real winner will be until after the Brexit referendum.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
