Financial Markets: U.S. stocks jump as Britons vote on Brexit
NEW YORK >> U.S. stocks made their biggest gain in a month Thursday as investors grew more optimistic that Britons will vote to stay in the European Union. Investors bought stocks and sold bonds, sending bond yields and banks higher.
On the last trading day before results from the British referendum, stocks continued to rise as investors grew more confident Britain won't leave the union. Bank stocks did the best, while materials companies also rose. The price of oil topped $50 a barrel. Utility companies, which are generally seen as a safe investment, lagged the market as investors took a few more risks.
U.S. stocks have advanced about 2 percent this week. Before that, the market slumped as investors worried that a "leave" vote would disrupt the economies of Britain and Europe. Throughout this year, the market has bobbed up and down as investors traded on political and central bank news, like the British referendum and comments from the Federal Reserve.
J.J. Kinahan, chief strategist at TD Ameritrade, said that's because the global economy is sluggish. Corporate profits and revenues have also been uninspiring.
"What it really shows is just a lack of growth," he said. "That makes it very difficult to commit capital and I think that's a pattern you're going to continue to see."
Dow goes higher
The Dow Jones industrial average jumped 230.24 points, or 1.3 percent, to 18,011.07. The Standard & Poor's 500 index rose 27.87 points, also 1.3 percent, to 2,113.32. The Nasdaq composite climbed 76.72 points, or 1.6 percent, to 4,910.04.
European stock indexes also advanced. France's CAC 40 rose 2 percent and Germany's DAX gained 1.8 percent. Britain's FTSE 100 rose 1.2 percent.
Bond prices declined, sending the yield on the 10-year Treasury note up to 1.75 percent from 1.69 percent a day earlier.
Higher bond yields mean higher interest rates, which allow banks to make money on lending. Citigroup rose $1.78, or 4.2 percent, to $44.46 and Bank of America gained 43 cents, or 3.2 percent, to $14.04.
The British pound rose to $1.4808 from $1.4691, its highest level of the year. The pound has gotten stronger as investors grew more confident Britain will stay in the EU. The dollar rose to 105.78 yen from 104.47 yen. The euro rose to $1.1351 from $1.1307.
U.S. crude rose 98 cents, or 2 percent, to $50.11 a barrel in New York. Brent crude, the benchmark for international oil prices, rose $1.03, or 2.1 percent, to $50.91 a barrel in London. Among energy stocks, Chevron picked up $2.15, or 2.1 percent, to $104.44 and ConocoPhillips rose $1.64, or 3.7 percent, to $45.63.
Fertilizer maker Mosaic climbed $1.26, or 4.7 percent, to $28 on reports that the large potash companies of Russia and Belarus might start working together, something that haven't done since 2013. That might bolster prices of the fertilizer, which have slumped in recent years. Other mining and chemicals companies also surged.
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.