Wall Street bets on Britain staying in EU; stocks rally

By: | Published: June 24, 2016 7:36 AM

US stocks rallied on Thursday, led by bank shares, as Wall Street bet strongly that Britain is voting to remain part of the European Union, potentially avoiding a hit to European trade and its consequences to global economic growth.

wall street US stocks rallied on Thursday, led by bank shares, as Wall Street bet strongly that Britain is voting to remain part of the European Union. (Reuters)

US stocks rallied on Thursday, led by bank shares, as Wall Street bet strongly that Britain is voting to remain part of the European Union, potentially avoiding a hit to European trade and its consequences to global economic growth.

There are no exit polls for the referendum, for which polls close at 5 p.m. EDT (2100 GMT). Although bookmakers give the remain camp a more than 80-percent chance of victory, recent polls continued to show the decision as too close to call.

The British pound rallied against the US dollar, brushing $1.50 to hit its highest since late December. It was recently up 1.22 percent at $1.4882.

Also Read: Wall Street ends higher as Britain seen staying in European Union

“People are expecting that Britain is going to vote to stay in the EU based on what’s happening here, particularly with the fact that financials are leading,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

“They view the potential disruption of a British exit as a major financial event. The relief rally, makes sense, would be strongest among those names.”

The Dow Jones industrial average rose 230.24 points, or 1.29 percent, to 18,011.07, the S&P 500 gained 27.87 points, or 1.34 percent, to 2,113.32 and the Nasdaq Composite added 76.72 points, or 1.59 percent, to 4,910.04.

The Dow industrials closed back above 18,000 and at its highest since April 27. The financial sector led the S&P 500 with a 2.1 percent gain.

The CBOE Volatility index fell 18.5 percent, its largest daily percentage decline since October 2013.

Earlier, US jobless claims and factory data pointed to a strengthening economy.

Given the improving economic backdrop, the S&P 500 could hit a record high in the next few days if Britons decide to stay in the EU, Jankovskis said.

“People generally view that as a positive for emerging markets, crude oil, so this suggests this is a rally that would have some legs,” he said.

The S&P 500 closed 0.8 percent below its record closing high hit May last year.

Software maker Twilio Inc nearly doubled in its market debut, rising as high as $29.60 after pricing at $15. It closed up 91.9 percent at $28.79.

Micron Technology added 10.5 percent at $14.05 in more than three times the average daily volume of the past 10 days.

About 6.4 billion shares changed hands in U.S. exchanges, below the 6.8 billion average over the past 20 sessions.

Advancing issues outnumbered declining ones on the NYSE by a ratio of 4.98-to-1 and on the Nasdaq, a 3.57-to-1 ratio favored advancers.

The S&P 500 posted 52 new 52-week highs and 2 new lows; the Nasdaq recorded 88 new highs and 26 new lows.

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