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Sarhan In Reuters: US STOCKS-S&P 500 futures fall as 'remain' barely leads in early UK vote count

Markets | Thu Jun 23, 2016 10:07pm EDT
* Sterling weakens against the dollar
* Opinion poll put “remain” campaign in lead
* Banks climb after Fed gives passing grade in stress tests
* Indexes up: Dow 1.3 pct, S&P 1.3 pct, Nasdaq 1.6 pct (Adds detail on market reaction, comment)
By Noel Randewich
June 23 U.S. stock index futures dropped late on Thursday as early voting returns suggested Britain was on the verge of leaving the European Union, a move that investors fear could hurt the global economy.
S&P E-mini futures fell as much as 2 percent in after-hours trading before paring losses to trade down 1.2 percent.
Early results from the referendum showed margins were nail-bitingly tight, with the “remain” camp leading by less than 1 percentage point with about a quarter of voting areas counted.
Sterling fell as low as $1.4351 against the dollar, more than wiping out its earlier gains, which had lifted the pound above $1.50 for the first time this year on the back of a YouGov opinion poll that suggested Britons had voted 52-48 percent to stay in the EU.
Reflecting nervousness among investors, futures on the VIX volatility index rose 1.3 points to 17.9.
“Big institutions were clearly caught off guard. This has a panic type of feel to it,” said Adam Sarhan, chief executive of Sarhan Capital.
Earlier on Thursday, U.S. stocks rose as investors bet the United Kingdom would remain part of the European Union, potentially avoiding damage to European trade and its consequences for the global economy.
In extended trade, Goldman Sachs Group added 1.17 percent and Bank of America climbed 1.5 percent after the Federal Reserve said all 33 stress-tested U.S. banks met minimal capital requirements.
In regular trade earlier, the Dow Jones Industrial Average rallied 1.29 percent to end at 18,011.07 points, its highest level since late April. The S&P 500 surged 1.34 percent to 2,113.32, just 0.8 percent short of its record closing high hit in May last year. The Nasdaq Composite added 1.59 percent to 4,910.04.
The financial sector led the S&P 500 stock index with a 2.1 percent gain.
With investors optimistic about a victory for Britain’s “Remain” campaign, the CBOE Volatility index fell 18.5 percent, its largest daily percentage decline since October 2013.
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.
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 two new lows; the Nasdaq recorded 88 new highs and 26 new lows. (Additional reporting by Richard Leong and Rodrigo Campos; Editing by Cynthia Osterman and Leslie Adler)