Stock Market News For June 21, 2016

Benchmarks ended higher on Monday after polls suggest that the U.K. will remain in the European Union. As prospects of a U.K. exit from the European Union (EU) diminishes, investors piled into riskier assets and abandoned safe havens such as government bonds and gold. Last week, investors were increasingly edgy over the referendum, which is slated on Thursday, on whether U.K. should stay in the EU.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.

The Dow Jones Industrial Average (DJI) gained 0.7% to close at 17,804.87. The S&P 500 advanced 0.6% to close at 2,083.25. The tech-laden Nasdaq Composite Index closed at 4,837.21, increasing 0.8%. The fear-gauge CBOE Volatility Index (VIX) tanked 11.6% to settle at 17.16. A total of around 6.6 billion shares were traded on Monday, less than the last 20-session average of 6.83 billion. Advancers outpaced declining stocks on the NYSE. For 75% stocks that advanced, 23% declined.

Weekend polls showed a swing toward “remain” in the run up to the Brexit vote, which eventually helped stocks rally on Monday. Thanks to the “remain” votes, concerns about U.K.’s exit from the EU and the potential damage it will have on Britain’s economic growth, jobs, investment and trade, reduced.

Access to the single market will help British firms export and expand their business and will also help them enjoy other essential benefits including free movement of goods, services, capital and people. Moreover, such polls had reduced concerns about bouts of volatility and U.K. sinking into recession. Prospect of a U.K. exit from the EU had weighed on stocks dragging the Dow down 1.1% last week, the index’s biggest weekly decline in more than a month.

Nevertheless, scales swung for Britain staying in the EU. Among the notable weekend polls, Survation poll for The Mail showed 45% in favor for the U.K. to remain in the EU, while 42% was in favor of leaving. This is in contrast to a previous survey conducted by Survation, which had put support for a Brexit ahead by 3 points. Another survey by YouGov for the Sunday Times showed 44% was in favor of “remain” and 43% supported “leave”. Bookmakers including Betfair and Ladbrokes (LON:LAD) also forecast a 73% chance that Brits will opt to stay in the EU.

Speculation that the death of British politician Jo Cox, an active pro-EU campaigner is responsible for swinging the vote in favor of ‘Bremain’ is doing the rounds. However, Anthony Well, director in YouGov’s political and social research team begs to differ. He said that “While there will be speculation about whether this movement is connected to the tragic death of Jo Cox, we do not think that it is”. He added: “The underlying figures suggest the movement may be more to do with people worrying about the economic impact of leaving the EU”.

Stocks made up much of the ground lost in last week’s fall, with 9 out of 10 sectors of the S&P 500 ending in the green. The Financial Services Select Sector SPDR (XLFS) gained 1.1%, the highest among the S&P 500 sectors. Key stocks from the sector including, Citigroup Inc (NYSE:C). (AXP ) increased 0.8%, 1%, 2.3%, 0.7% and 0.7%, respectively.

The Industrial Select Sector SPDR (XLI) advanced 0.9% and was the second biggest gainer among the S&P 500 sectors. Key industrial stocks including Norfolk Southern Corporation (NYSE:NSC) (MMM ) rose 2.3%, 0.8% and 1.4%, respectively.

Separately, energy shares moved north as oil rally continues into Monday. The WTI crude rose 2.8% to $49.37 a barrel, while Brent crude increased 2.9% to $50.65 per barrel. The Energy Select Sector SPDR (XLE (NYSE:XLE)) gained almost 0.9%. Key holdings from the sector including Chevron Corporation (NYSE:CVX) (Original post

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Written By: Zacks Investment Research