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Sarhan in Reuters: #WallStreet Rallies For Third Day, Healing Brexit Wounds

Thursday, June 30, 2016

Wall Street posted solid gains for a third straight day on Thursday as Britain’s central bank raised the prospect of stimulus and consumer staples shares gained on news of Mondelez International’s $23 billion bid for Hershey.
The three U.S. indexes were each up at least 1 percent, and have erased the bulk of their losses in the wake of Britain’s shock vote a week ago to leave the European Union that set off the worst two-day decline for Wall Street in 10 months.
In the wake of the referendum, Bank of England Governor Mark Carney said on Thursday that the central bank would probably need to pump more stimulus into Britain’s economy over the summer.
“We’re reversing the ‘Brexit’ as it becomes evident that it was more of a political vote and decision than an economic decision,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
Stocks also might be benefiting as portfolio managers adjust their holdings at the end of the quarter, Hellwig said.
The Dow Jones industrial average was up 218.86 points, or 1.24 percent, at 17,913.54, the S&P 500 gained 24.98 points, or 1.21 percent, at 2,095.75 and the Nasdaq Composite added 50.22 points, or 1.05 percent, at 4,829.47.
All ten S&P sectors were higher, led by consumer staples shares. Hershey shares surged 13.5 percent after news that Mondelez had made a takeover offer, which Hershey rejected, looking to create the world’s largest confectioner. Mondelez gained 4.2 percent.
Investors are still bracing for volatility in coming weeks amid uncertainty about how Britain will pursue its EU exit, with some pointing to more possible downside. The S&P 500, which was within 17 points of its May 2015 record high a week ago, was poised to close out its third straight positive quarter.
In the wake of Carney’s comments, investors turned attention to St. Louis Fed President James Bullard’s speech, scheduled for 3:15 p.m. ET (1915 GMT), on U.S. monetary policy outlook for clues on the U.S. Federal Reserve’s direction.
“Central banks are doing their best to step in and send stocks higher,” said Adam Sarhan, chief executive officer of Sarhan Capital. “I think the Fed is more than ready to follow suit if market conditions worsen.”
Visa and MasterCard shares were both down about 3 percent after a federal appeals court threw out an antitrust settlement the credit card companies had reached with millions of retailers. The stocks were the two biggest drags on the S&P.
Advancing issues outnumbered declining ones on the NYSE by 2,315 to 719, for a 3.22-to-1 ratio on the upside; on the Nasdaq, 1,966 issues rose and 850 fell for a 2.31-to-1 ratio favoring advancers.
The S&P 500 posted 82 new 52-week highs and 1 new low; the Nasdaq recorded 66 new highs and 23 new lows.
(Assitional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty)