Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 23, 2016. REUTERS/Brendan McDermid
NEW YORK: The three major US stock indexes rose about 1% each to record their biggest percentage gains in a month as investors grew confident that Britain would choose to remain in the European Union in Thursday’s referendum.
Markets across the globe have been rattled over the past two weeks as investors speculated about the consequences of Britain’s exit, including the unraveling of the bloc.
The “Remain” camp has found 52% favour, according to an Ipsos MORI poll conducted on Tuesday and Wednesday. The final result of the referendum will be known on Friday.
US markets also took solace in Fed chair Janet Yellen’s two-day testimony this week when she expressed optimism about the economy and downplayed the chances of a recession this year.
“Regardless of the outcome in the UK, we will see a relief rally in the US today and tomorrow,” said Mohannad Aama, managing director, Beam Capital Management in New York.
“I think we’ll continue to go up tomorrow even if a “Leave” vote prevails because there’s a lot of money in the sidelines ... and that will be routed to safer havens and that includes US stocks.”
The sterling hit a year-high on Thursday while gold, which had gained favor amid uncertainty in the past month, dropped to a two-week low.
Oil prices rose despite a smaller-than-expected draw on US crude as appetite for risky assets increased.
The CBOE Volatility Index, Wall Street’s “fear gauge”, fell 14.93% to 18.01, compared to its long-term average of 20.
At 12:40pm ET (1640 GMT) the Dow Jones Industrial Average was up 165.02 points, or 0.93%, at 17,945.85.
The S&P 500 was up 20.15 points, or 0.97%, at 2,105.6.
The Nasdaq Composite was up 58.64 points, or 1.21%, at 4,891.96.
Nine of the 10 major S&P sectors were up, led by a 1.71% rise in the financials index, helped by JPMorgan and Citigroup.
Utilities were down 0.1%.
Markets were also buoyed by data that pointed to a resilient labour market. The number of Americans filing for unemployment benefits fell last week to a near 43-year low.
Micron Tech jumped 8.8% to US$13.84 after Susquehanna raised rating to “positive” from “neutral”. The stock was the biggest percentage gainer among S&P components.
Macy’s rose 2.2% after Terry Lundgren said he would step down as CEO next year.
Advancing issues outnumbered decliners on the NYSE by 2,565 to 389. On the Nasdaq, 2,209 issues rose and 510 fell.
The S&P 500 index showed 46 new 52-week highs and one new low, while the Nasdaq recorded 71 new highs and 16 new lows. - Reuters
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