Stocks rallied on a broad front as investors bet Britain would vote to remain in the European Union (EU).
All 10 sectors of the S&P 500 advanced with financials leading, up 2.1%. Notable gainers included Prudential Financial Inc (PRU), Charles Schwab Corp (SCHW), Bank of America Corp (BAC) and Citigroup Inc (C).
The Federal Reserve’s “stress tests” of the big banks showed an improvement in the banks’ ability to defend against a severe downturn, which also had a positive impact on the sector Thursday.
The technology sector was also strong, gaining 1.4%. Micron Technology, Inc. (MU) jumped 10.5% after being upgraded by Nomura to “Outperform.” Adobe Systems Incorporated (ADBE) gained 2.3%.
The U.S. dollar fell against the euro and pound. WTI crude oil added 2% to $50.11 a barrel, and gold fell 0.5% to $1,261.20 an ounce.
At Thursday’s close, the Dow Jones Industrial Average gained 230 points at 18,011, the S&P 500 rose 28 points to 2,113, the Nasdaq was up 77 points at 4,910, and the Russell 2000 jumped 23 points to 1,172.
The NYSE Composite’s primary exchange traded 852 million shares with total volume of 3.3 billion. The Nasdaq crossed 1.7 billion shares. On the Big Board, advancers outpaced decliners by 4.8-to-1. On the Nasdaq, advancers led by 3.6-to-1. Block trades on the NYSE increased to 4,824 from 4,593 on Wednesday.
A confirmation of support at the SPDR S&P MidCap 400 ETF’s (MDY) 50-day moving average near $267 means the line now represents significant support. Thursday’s close at its daily high on above-average volume is positive.
MDY is less than 2 points from the June closing high at $278 but still must confront overhead before reaching its all-time closing high at $282, made in June 2015.
Conclusion
Anticipating a “No” Brexit vote, investors took a “risk-on” approach and bought stocks, especially financials and energy.
But as of this writing, more than 90% of the vote is in, and it looks like investors were wrong and Britain will leave the EU. If the Brexit succeeds, gold and other defensive investments are likely to advance while stocks fall.
Investors should avoid reacting emotionally and selling everything. A solid correction could provide some outstanding bargains.
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.
