Dow erases triple-digit loss as odds of Brexit seen as lessening
U.S. stocks finished higher on Thursday, with the S&P 500 halting a five-day losing streak, as investors considered Britain's possible exit from the European Union.
"For the most part, everything is related to the credible possibility of a seismic event called Brexit next week," Art Hogan, chief market strategist Wunderlich Securities, told CBS MoneyWatch. "Up until a couple of weeks ago, the 'remain-in camp' was in the lead, but now it's too close to call, which is the worst possible thing for equity markets, so we have a risk-off attitude, and people are hiding in gold and government bonds."
Stocks dialed back hefty losses as the odds of British voters opting to depart the EU declined, according to a tracking by Oddschecker's survey of bookmakers' implied probability. After exceeding 44 earlier on, the odds of a British exit from the EU fell below 39, and campaigning for the Brexit referendum was suspended for the rest of the day by proponents and opponents after a U.K. Labour Party lawmaker died after being shot.
After a triple-digit slide, the Dow Jones Industrial Average (I: DJI) turned higher, and ended the session at 17,733, up 93 points, or 0.5 percent. The S&P 500 (SPX) rose nearly 7 points, or 0.3 percent, at 2,078. The Nasdaq Composite (COMP) added 10 points, or 0.2 percent, to 4,845.
On Wednesday, the Federal Reserve held interest rates near record lows, delaying another step towards normalizing monetary policy in the face of slowing job gains and next week's vote in the United Kingdom.
The Bank of Japan followed suit, leaving its monetary stimulus as is, while the Bank of England and Swiss National Bank also kept rates unchanged.
"The Bank of Japan is the same position as the Fed, if you had a meeting this week then you're on hold, if you're not on hold you're on drugs," said Hogan, citing the potential disruption by the Brexit vote June 23. "There is no central bank that would make a move in front of [Brexit]. These guys are calling each other now, saying 'what's our plan B'," Hogan said of central bank chiefs.