Wall Street rebounds, snaps five-day losing streak – Metro US

Wall Street rebounds, snaps five-day losing streak

Wall Street rebounds, snaps five-day losing streak
By Lewis Krauskopf

By Lewis Krauskopf

(Reuters) – Wall Street closed higher on Thursday as investors digested the implications of a British lawmaker’s death on the country’s impending referendum on whether to leave the European Union.

The benchmark S&P 500 index snapped a five-day losing streak, after erasing sharp losses earlier in the session.

A British Member of Parliament was shot dead in the street in northern England, causing the temporary suspension of campaigning for next week’s referendum on EU membership. The lawmaker, Jo Cox, had been a vocal supporter of Britain remaining in the European Union.

The prospect of Britain’s voting to leave in the June 23 referendum has been rattling markets.

“We’re seeing a move in the pound rallying off its lows, the Treasuries coming off of their highs and the stocks coming off of their lows because of that,” said Lou Brien, market strategist at DRW Trading in Chicago. “People are anticipating that this could be one of those things that turns a vote back in favor of remain.”

The Dow Jones industrial average <.DJI> rose 92.93 points, or 0.53 percent, to 17,733.1, the S&P 500 <.SPX> gained 6.49 points, or 0.31 percent, to 2,077.99 and the Nasdaq Composite <.IXIC> added 9.98 points, or 0.21 percent, to 4,844.92.

Traders also said covering of short bets after several days of selling could be helping stock prices. Nine of 10 S&P sectors finished higher.

Global stocks have been under duress for a week amid looming uncertainty about the British vote and a focus on central bank policy.

“I believe there is a lot of positioning going on ahead of that event to try to hedge the risk of a negative outcome, and a negative outcome for the markets would be a vote to leave,” said Walter Todd, chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina.

The Federal Reserve on Wednesday left interest rates unchanged but signaled it still planned two hikes this year. Fed Chair Janet Yellen acknowledged the need to see clear signs of economic strength before lifting rates.

The S&P is up more than 1 percent for the year, rebounding since mid-February with help from higher oil prices. However, on Thursday energy shares <.SPNY> were the lone declining sector, falling 0.2 percent, as oil slumped to one-month lows.

The CBOE Volatility index <.VIX>, the most notable gauge of Wall Street anxiety, shot up to a 4-month high. After weeks of calm, the index has risen significantly this week.

Merck shares rose 2.5 percent, propping up the Dow and the S&P, after positive clinical trial results for cancer drug Keytruda.

Shares of Cavium fell 17.5 percent after the chipmaker said it would buy network equipment maker QLogic for about $1.36 billion. QLogic shares rose 9.3 percent.

About 7.3 billion shares changed hands on U.S. exchanges, above the 6.8 billion average over the past 20 trading days, according to Thomson Reuters data.

NYSE declining issues outnumbered advancers by a 1.05-to-1 ratio; on the Nasdaq, a 1.17-to-1 ratio favored decliners.

The S&P 500 posted 17 new 52-week highs and 4 new lows; the Nasdaq recorded 30 new highs and 59 new lows.

(Additional reporting by Karen Brettell and Saqib Iqbal Ahmed in New York and Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian and Nick Zieminski)

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