By Joseph Adinolfi and Carla Mozee, MarketWatch
Oil prices rise nearly 1% ahead of EIA data
U.S. stocks were on track to rise for a second straight session
Wednesday as Brexit fears abated and the perception that interest
rates will likely remain lower for longer lured investors back into
equities.
The Dow Jones Industrial Average climbed 150 points, or 0.9%, to
17,558, as nearly all 30 of the blue-chip gauges components trading
in positive territory, led by a 1.7% gain in General Electric
Co.(GE), the S&P 500 rose 19 points, or 0.9%, to 2,054, with
all 10 of its sectors trading higher led by a roughly 1% gain in
the energy and materials sectors.
Meanwhile, the tech-heavy Nasdaq Composite Index advanced 49
points, or 1%, to 4,741.
U.S. shares followed Asian and European stock markets, and as
oil futures rose roughly 1%
(http://www.marketwatch.com/story/oil-prices-march-higher-as-supply-hopes-offset-fading-brexit-fears-2016-06-29)
after a fall in weekly crude supplies.
Investors have shown that they are willing to wait for more
clarity about the timeline and details of the U.K.'s exit from the
European Union, dubbed Brexit. Meanwhile, they're shifting their
attention back to monetary policy, corporate earnings and the U.S.
economic outlook, said Jack Ablin, chief investment officer at BMO
Private Bank.
"The next time we come face to face with Brexit could be in the
second-quarter earnings results if we hear management wringing
their hands about the strong dollar," Ablin said.
Though the Fed has stayed mum about how the Brexit vote might
affect its outlook, investors now expect it will stay on hold for
the rest of the year. The Fed-funds futures market, where traders
place bets on the timing of future rate increases, is pricing in a
higher probability of a rate cut this year than a hike, according
to the CME Group's FedWatch tool.
With global bond yields expected to remain lower for longer,
dividend-paying utilities, technology and consumer-staples shares
are looking increasingly attractive, said Paul Nolte, portfolio
manager at Kingsview Asset Management.
"Now that the dust has settled, people are looking around and
saying 'well, rates will stay low, so I can go back to buying
dividend paying stocks," Nolte said.
The U.K. has yet to trigger Article 50 of the Lisbon Treaty,
which would initiate the process of withdrawing from the EU.
Leaders in Brussels are pushing for a quick start to the exit
process, but British Prime Minister David Cameron, who announced
his impending resignation after the vote, has said he would leave
that task to his successor.
Read:Brexit's Article 50: How 250 words could chart Britain's
future
(http://www.marketwatch.com/story/brexits-article-50-how-250-words-could-chart-britains-future-2016-06-25)
Also:After Brexit, will Britain change course and 'Breturn' to
the EU?
(http://www.marketwatch.com/story/after-brexit-get-ready-for-a-breturn-as-britain-reverses-course-2016-06-28)
Also read: 5 ways to stop Brexit from happening
(http://www.marketwatch.com/story/5-ways-to-stop-brexit-from-happening-2016-06-27)
On Tuesday
(http://www.marketwatch.com/story/dow-futures-rally-200-points-as-us-stocks-get-set-to-rebound-2016-06-28),
the Dow jumped 269.48 points, or 1.6%, to 17,409.72. It lost 900
points in the two sessions after the Brexit vote. The S&P 500
picked up 1.8%, while the Nasdaq Composite closed up 2.1%.
Economic data: Consumer spending increased for a second month in
May, though at a slower pace than the prior month.
Core prices rose at an annualized rate of 1.6% in May, according
to the PCE price index, the Fed's preferred gauge of inflation.
At 10 a.m. Eastern, a report on pending home sales in May is
expected from the National Association of Realtors. .
Movers and Shakers: Worthington Industries(WOR) shares rallied
3.1% after reporting stronger quarterly earnings than expected.
General Mills Inc.(GIS) rose nearly 2% after posting fiscal
fourth-quarter adjusted earnings and revenue
(http://www.marketwatch.com/story/general-mills-shares-rise-after-dividend-increase-earnings-beat-2016-06-29)
that topped Wall Street's expectations. The maker of Cheerios
cereal, Yoplait yogurt and other foods raised its quarterly
dividend as well as its target for cost savings.
GE (GE) rose after the U.S. government rescinded its designation
(http://www.marketwatch.com/story/ge-capital-no-longer-systemically-important-institution-government-rules-2016-06-29)
of GE Capital as a systemically important nonbank financial
institution.
Monsanto Co. (MON) shares dropped after the company reported
profit and sales for its fiscal third quarter that fell short of
expectations
(http://www.marketwatch.com/story/monsanto-misses-profit-and-sales-expectations-shares-drop-2016-06-29).
Separately, EU antitrust regulators signaled they will conduct a
strict review
(http://www.marketwatch.com/story/eu-to-open-review-of-bayer-monsanto-merger-2016-06-29-6485346)
of Bayer AG's (BAYN.XE) pending $62 billion merger with
Monsanto.
PrivateBancorp Inc.'s shares (PVTB) soared 23% after Canadian
Imperial Bank of Commerce (CM.T) said it's agreed to buy the
Chicago-based lender
(http://www.marketwatch.com/story/cibc-agrees-to-purchase-privatebancorp-for-38-billion-2016-06-29)for
about $3.8 billion in cash and stock.
Tesaro Inc.(TSRO) shares rallied 89% after the biotech company's
late-stage trials of an ovarian cancer treatment met primary
endpoints
(http://www.marketwatch.com/story/tesaros-stock-nearly-doubles-toward-record-open-after-successful-cancer-treatment-trial-2016-06-29).
Shire PLC(SHPG) (SHPG) shares climbed nearly 4% after the
drugmaker said a trial of its treatment
(http://www.marketwatch.com/story/shires-stock-surges-after-adhd-drug-trial-meets-key-endpoints-2016-06-29)for
attention-deficit/hyperactivity disorder, or ADHD, met its primary
goals.
Nike Inc.(NKE) shares inched higher after the company reported
quarterly profit fell 2%
(http://www.marketwatch.com/story/nike-struggles-in-north-america-as-rivals-score-2016-06-28)
late Tuesday. Following the report, shares tumbled in after hours
trade.
Autoliv Inc.(ALV) was down 4.9% after the maker of seat belts
and air bags said it's cooperating with Toyota Motor Corp.'s
(7203.TO) (7203.TO) recall of 1.4 million vehicles.
Southwestern Energy Co.(SWN) fell 3% after the oil and gas
producer proposed a stock offering
(http://www.marketwatch.com/story/southwestern-energys-stock-falls-after-launching-share-offering-2016-06-29).
Terms of Wal-Mart Stores Inc.'s(WMT) recent deal to buy a 5%
stake in JD.com Inc.(JD) could spur Wal-Mart to increase its
investment in the Chinese e-commerce company, The Wall Street
Journal reported
(http://www.wsj.com/articles/wal-mart-deal-with-jd-com-includes-incentives-for-retailer-to-raise-stake-1467191406?mod=wsj_nview_latest).
AeroVironment Inc. shares (AVAV) late Tuesday fell as the drone
maker posted a decline in quarterly revenue and issued a financial
outlook that largely fell short of expectations
(http://www.marketwatch.com/story/aerovironment-drone-sales-lose-altitude-2016-06-28).
Other markets: Gold futures were up 0.2% at $1,317.00 an ounce.
The ICE U.S. Dollar Index was down 0.3% at 96.938.
(END) Dow Jones Newswires
June 29, 2016 09:49 ET (13:49 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.