US close: Shares rally as Brexit fears ease
US shares closed higher after a slightly choppy session saw early gains scaled back as Federal Reserve Chair Janet Yellen said a potential UK exit from the European Union could have “significant economic repercussions” and opinion polls showed a lead for the 'Remain' camp.
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices all finished the session higher for the second day in a row.
After a positive start to the session Yellen's concerns resonated with investors who were also looking for a steer on the next rise in US interest rates. She said the Fed would take a cautious approach, closely monitoring financial developments.
She told the Senate Banking Committee that she saw “considerable uncertainty” over the US economic outlook, also highlighting the potential impact of the UK referendum which takes place on Thursday.
Yellen said the pace of improvement in the labour market appeared to have slowed, but insisted it was important not to overreact to one or two reports, adding that she reckoned the recent slowing was “transitory”.
“In the current environment of sluggish growth, low inflation, and already very accommodative monetary policy in many advanced economies, investor perceptions of and appetite for risk can change abruptly,” Yellen said.
“One development that could shift investor sentiment is the upcoming referendum in the United Kingdom. A U.K. vote to exit the European Union could have significant economic repercussions.”
Market participants reacted to an ORB poll for the Daily Telegraph which put the Remain campaign in the lead by seven points, and a YouGov poll for The Times giving the Leave camp a two-point lead.
In addition, a phone poll by Survation for IG showed the Remain vote stayed at 45% compared to 44% leave, up two percentage points as the share of undecided voters shrank to 1%.
Elsewhere, oversupply worries saw West Texas Intermediate fall 1.1% to $48.45, while Brent Crude fell slightly but remained just above the $50 mark.
This did not deter investors from buying energy sector shares, with Marathon Oil, Range Resources, Murphy Oil and Diamond Offshore Drilling all ahead on the day.
S&P 500 - Risers
Marathon Oil Corp. (MRO) $15.09 +4.21%
Csra Inc. (CSRA) $23.70 +3.54%
Micron Technology Inc. (MU) $12.75 +3.49%
United Continental Holdings Inc. (UAL) $44.86 +3.36%
Tesoro Corp. (TSO) $77.06 +2.73%
Range Resources Corp. (RRC) $46.45 +2.70%
Diamond Offshore Drilling Inc. (DO) $25.20 +2.69%
Western Digital Corp. (WDC) $48.87 +2.65%
Coach Inc. (COH) $40.41 +2.56%
Murphy Oil Corp. (MUR) $31.85 +2.41%
S&P 500 - Fallers
Carmax Inc. (KMX) $48.14 -4.92%
United States Steel Corp. (X) $17.40 -4.92%
Endo International Plc (ENDP) $15.40 -4.17%
Borg Warner Inc. (BWA) $33.35 -3.97%
Netflix Inc. (NFLX) $90.99 -3.00%
AutoNation Inc. (AN) $47.89 -2.98%
Viacom Inc. Class B (VIAB) $43.53 -2.94%
Williams Companies Inc. (WMB) $21.67 -2.91%
Nucor Corp. (NUE) $49.99 -2.55%
Mallinckrodt Plc Ordinary Shares (MNK) $56.53 -2.55%
Dow Jones I.A - Risers
Microsoft Corp. (MSFT) $51.19 +2.24%
JP Morgan Chase & Co. (JPM) $62.95 +0.93%
Apple Inc. (AAPL) $95.91 +0.85%
Nike Inc. (NKE) $54.77 +0.75%
Pfizer Inc. (PFE) $34.75 +0.72%
Verizon Communications Inc. (VZ) $54.10 +0.63%
Chevron Corp. (CVX) $103.24 +0.61%
Wal-Mart Stores Inc. (WMT) $71.46 +0.51%
Intel Corp. (INTC) $32.32 +0.47%
Exxon Mobil Corp. (XOM) $91.53 +0.45%
Dow Jones I.A - Fallers
Boeing Co. (BA) $131.52 -0.93%
Walt Disney Co. (DIS) $98.82 -0.75%
McDonald's Corp. (MCD) $122.63 -0.64%
Johnson & Johnson (JNJ) $116.18 -0.31%
Unitedhealth Group Inc. (UNH) $138.19 -0.24%
United Technologies Corp. (UTX) $101.57 -0.13%
Cisco Systems Inc. (CSCO) $28.77 -0.10%
American Express Co. (AXP) $62.29 -0.02%
Visa Inc. (V) $77.33 -0.01%
E.I. du Pont de Nemours and Co. (DD) $67.55 -0.00%
Nasdaq 100 - Risers
Micron Technology Inc. (MU) $12.75 +3.49%
Western Digital Corp. (WDC) $48.87 +2.65%
Microsoft Corp. (MSFT) $51.19 +2.24%
Symantec Corp. (SYMC) $20.92 +2.20%
Cerner Corp. (CERN) $54.81 +1.97%
Seagate Technology Plc (STX) $23.86 +1.84%
Adobe Systems Inc. (ADBE) $99.72 +1.77%
Verisk Analytics Inc. (VRSK) $80.16 +1.57%
T-Mobile Us, Inc. (TMUS) $42.92 +1.51%
Ctrip.Com International Ltd. Ads (CTRP) $39.64 +1.30%
Nasdaq 100 - Fallers
Liberty Global plc Series C (LBTYK) $31.25 -8.79%
Liberty Global plc Series A (LBTYA) $31.85 -8.66%
Endo International Plc (ENDP) $15.40 -4.17%
Biomarin Pharmaceutical Inc. (BMRN) $81.22 -3.38%
Netflix Inc. (NFLX) $90.99 -3.00%
Viacom Inc. Class B (VIAB) $43.53 -2.94%
Celgene Corp. (CELG) $96.86 -2.45%
Baidu Inc. (BIDU) $162.80 -2.24%
Regeneron Pharmaceuticals Inc. (REGN) $345.14 -2.13%
Biogen Inc (BIIB) $233.00 -1.85%