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Jun 28, 2016

Wall Street at Close Report, by CNBC on June 28, 2015: Stocks Steady After Brexit Sell-Off; Dow Closes Up More Than 250 Points

cnbc.com

Evelyn Cheng


U.S. stocks closed higher Tuesday, lifted by gains in oil prices, as investors looked for bargains after the Brexit sell-off.

The major indexes extended gains with about an hour to the close. The Dow Jones industrial average traded more than 250 points higher. Travelers and Goldman Sachs contributed the most to gains in afternoon trade, while DuPont had the greatest negative impact.
"The (indications) are now more evident the exiting of Great Britain out of the EU, while it has negative consequences, are most likely not (going to) derail the global economy," said Peter Cardillo, chief market economist at First Standard Financial.

The Nasdaq composite traded 2 percent higher, helped by gains in Facebook, Amazon.com, Microsoft and Apple.

"It's up but everyone's waiting for the shoe to drop," said JJ Kinahan, chief strategist at TD Ameritrade. "What's confusing everyone is the strength in the bond market."

The "toughest point for traders the last few days is we're going through a repricing process, especially for financials so the relationships aren't where they should be," he said.
Treasury yields held slightly above recent lows, with the 2-year yield around 0.61 percent and the 10-year yield around 1.46 percent.
"A little easing of some of the initial panic has at least prevented us from testing all-time lows," said Craig Bishop, lead strategist, U.S. Fixed Income Strategies Group at RBC Wealth Management. "The ultimate move to Brexit is a little less likely or will play out over a very long time."
Energy and financials stocks led S&P 500 advancers as the index held about 1 percent higher in afternoon trade. U.S. crude oil futures settled up $1.52, or 3.28 percent, at $47.85 a barrel.

"We're still very much in reaction mode right now for U.S. equities," said Jeremy Klein, chief market strategist at FBN Securities. "It's mostly taking its cues from elsewhere."
In Europe, the German DAX was about 2 percent higher while the STOXX Europe 600 index traded more than 2.5 percent higher. Asian stocks ended mostly higher, with the Nikkei 225 eking out a 0.09 percent gain.

Pound sterling held slightly above lows not seen in more than 30 years to trade near $1.333 around 2:10 p.m. ET.

The U.S. dollar index traded about a third of a percent lower after its recent surge, while the euro was near $1.104 and the yen around 102.7 yen versus the greenback.
"This is going to take a long time to play out and I think the initial shock is being a little reversed right now," said Doug Cote, chief market strategist at Voya Investment Management. "This is not 2008. It's more like 2011."
On Monday, U.S. stocks extended Friday's post-Brexit plunge with a decline of 1.5 percent or more that took the Dow and S&P 500 to close at their lowest since March 10. The Nasdaq composite closed at its lowest since late February.

In the last two trading days, global markets have lost a record $3.0 trillion, according to Howard Silverblatt of S&P Dow Jones Indices.
"I think it was just a market that got a little ahead of itself to the downside," said Robert Pavlik, chief market strategist at Boston Private Wealth.
"A little bit of 'cooler heads are prevailing' and seeing this as an opportunity to get in. How long it lasts is going to be the big question," he said.
Britain voted to leave the European Union last Thursday, surprising markets.

In his first comments on the referendum results, European Central Bank President Mario Draghi said, "Sadness is the best word for what we feel when we witness changes of this magnitude."
A panel discussion with the heads of the European Central Bank, the Bank of England and the Federal Reserve, scheduled for Wednesday in Portugal, has since been canceled.
In economic news, the final revision to U.S. first-quarter GDP edged up to 1.1 percent.

The Conference Board's June consumer confidence index came in at 98.0, its highest since October, versus 92.4 in May.
Lynn Franco, director of economic indicators at The Conference Board, noted the results did not reflect post-Brexit sentiment.
Going forward, she said "it depends on how heavy the impact is on financial markets. Usually these sort of events have a temporary impact on confidence. ... It depends more on what is happening with jobs and income growth. I think the consumer remains cautiously optimistic."
 
DJIA Dow Industrials 17409.11 268.87 1.57%
S&P 500 S&P 500 Index 2036.06 35.52 1.78%
NASDAQ NASDAQ 4691.87 97.42 2.12%
In afternoon trade, the Dow Jones industrial average rose 185 points, or 1.08 percent, to 17,327, with Travelers leading advancers and DuPont the greatest laggard.
The S&P 500 gained 26 points, or 1.28 percent, to 2,026, with energy leading all 10 sectors higher.
The Nasdaq composite added 79 points, or 1.73 percent, to 4,673.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, fell sharply to trade near 20.
About five stocks advanced for every decliner on the New York Stock Exchange, with an exchange volume of 590 million and a composite volume of 2.6 billion in afternoon trade.
Gold futures for August delivery settled down $6.80 at $1,317.90 an ounce.
Reuters contributed to this report.
On tap this week:

Tuesday
Earnings: Nike
7:00 p.m. Federal Reserve Governor Jerome Powell speaks on recent economic developments, monetary policy considerations and longer-term prospects
Wednesday
Earnings: Monsanto, General Mills, Pier 1 Imports
8:30 a.m. Personal income, consumer spending
10:00 a.m. Pending home sales
Thursday
Earnings: ConAgra, Constellation Brands, Darden Restaurants, McCormick, Paychex, Schnitzer Steel, Micron
8:30 a.m. Jobless claims
9:45 a.m. Chicago PMI
3:20 p.m. St. Louis Fed President James Bullard speaks on U.S. economy and monetary policy
Friday
Vehicle sales
9:45 a.m. Markit manufacturing PMI
10:00 a.m. ISM manufacturing
10:00 a.m. Construction spending
11 a.m. Cleveland Fed President Loretta Mester on economic outlook and monetary policy
*Planner subject to change