Wall Street was set to open higher for the second day on Wednesday as the initial panic surrounding Britain's vote to leave the European Union settled and investors sought bargains among beaten-down stocks.
Wall Street was set to open higher for the second day on Wednesday as the initial panic surrounding Britain’s vote to leave the European Union settled and investors sought bargains among beaten-down stocks.
The “Brexit” verdict on Friday sent shockwaves through global markets and wiped out about $3 trillion in a two-day selloff.
Banks and technology stocks – worst hit since the referendum – were up for the second day.
Oil prices marched higher on fears of a strike by oil workers in Norway. Gold prices rose indicating that investors were still cautious of the recovery.
“What we are seeing is a choppy market, and uncertainty will continue,” said Ernie Cecilia, chief investment officer of Bryn Mawr Trust in Pennsylvania.
Wall Street closed higher on Tuesday as investors took stock of the impact of the vote on US markets and strong data raised hopes of an economic recovery.
The Commerce Department said on Wednesday consumer spending, which accounts for more than two-thirds of US economic activity, increased 0.4 percent in May, pointing to an acceleration in economic growth in the second quarter.
Investors are now hoping that central banks around the world will ease monetary policy to weather the storm as Britain and the EU chalk out the next steps for the country’s exit from the trading bloc.
Britain’s vote could pose a new drag on the US economy at a time when momentum in the job market may already by slowing, Federal Reserve governor Jerome Powell said on Tuesday.
“The central banks will stay ready and you’ll probably see a couple of policy easing from the Bank of England and I think the likelihood of Fed increases are probably low,” Cecilia said.
Traders have priced in a mere 17 percent chance of a hike as late as December.
Dow e-minis were up 107 points, or 0.62 percent at 8:36 a.m. ET (1236 GMT), with 37,714 contracts changing hands. S&P 500 e-minis were up 12.25 points, or 0.6 percent, with 288,298 contracts traded. Nasdaq 100 e-minis were up 26.5 points, or 0.62 percent, on volume of 33,190 contracts.
PrivateBanCorp’s shares jumped 22.7 percent to $44.07 after agreeing to be bought by Canadian Imperial Bank of Commerce for about $3.8 billion.
Williams Cos was up 1.70 percent at $20.99 after Energy Transfer Equity terminated its merger with the company. Energy Transfer was up 2.08 percent at $14.71.