U.S. shares extended gains with the Dow Jones Industrial Average up nearly 200 points on Thursday as investors continued to chase stocks in the wake of the sharp selloff triggered by the U.K.’s vote to leave the European Union last week.
added 188 points, or 1.1%, to 17,883, led by a 2.5% jump in General Electric Co.
The S&P 500
climbed 21 points, or 1%, to 2,092, with all 10 sectors in positive territory, led by a 1.8% rise in consumer-staples stocks. The Nasdaq Composite
gained 44 points, or 0.9% to 4,823.
The main indexes looked set to book monthly losses but were modestly higher over the quarter and on Wednesday turned positive on a year-to-date basis.
“We are clawing back from the losses after Brexit as investors realized that it was not the watershed event that they thought it was,” said James Abate, chief investment officer at Centre Asset Management LLC.
Still, he cautioned that it may too soon the judge the impact of the U.K.’s departure from the EU.
which posted their biggest gain on Wednesday since early April, is capping the stock market’s upside. But a rebound in the British pound
for the third straight session, as well as a reading of initial U.S. jobless claims that showed that the pace of layoffs nationwide remained extremely low, supported risk appetite.
“There’s a bit of complacency out there,” said Jeff Carbone, managing director at wealth manager Cornerstone Financial Partners.
Even as the U.K.’s FTSE 100 has erased its post-Brexit slide and U.S. benchmarks logged in the last two sessions their largest two-day jump since February, this doesn’t change the fact that the stock market is trading at historically high valuations amid continuing political uncertainty, Carbone said.
“Get ready for continued volatility,” he added.
While EU leaders are urging the U.K. to move ahead with the first step in triggering Brexit, the country is in political turmoil after Prime Minister David Cameron said he would resign and leave that move to his successor.
Brexit backer and former London Mayor Boris Johnson said Thursday he won’t participate in the race to succeed Cameron, confounding widely held expectations.
“It appears that markets have developed into more of a consolidation and there will be fears that this could simply have been an unwinding move that provides another chance to sell,” said Richard Perry, market analyst at Hantec Markets, in a note.
From a technical-analysis perspective, “the longer-term trend [for the S&P 500] remains up since February,” said to Frank Cappelleri, technical analyst at Instinet, in emailed comments.
But the index “is still searching for direction in the short-term,” Cappelleri said. “While the [S&P] has had it chances to break out (and down) multiple times over the last three months, it has yet to thoroughly leverage any apparent support [or] resistance penetrations.”
Meanwhile, Katie Stockton, chief technical strategist at BTIG, cautioned that signs of upside exhaustion are emerging after the market’s “impressive” bounce. “We expect resistance to be discovered today, leading to further deterioration in short-term momentum,” she said in a note.
Economic docket: A measure of Chicago-area economic activity surged in June on a big advance in the number of purchasing managers, indicating improving production and new orders.
Stocks to watch: Yahoo Inc.
inched higher by 1.6% as shareholders held their annual meeting.
Shares of Lions Gate Entertainment Corp.
gained 0.9% following an agreement to be purchased by Starz
for $4.4 billion in cash and stock. Starz’s shares popped up 11%.
Wal-Mart Stores Inc.
gained 0.9% after announcing Thursday it is launching Wal-Mart Pay in 11 more states, making its mobile pay service available in more than 500 new stores.
Darden Restaurants Inc.
whose chains include Olive Garden and The Capital Grille, tumbled 3.4% after the company posted a rise in quarterly profit while sales missed expectations. Darden did raise its dividend by 12%.
Liquor and beer maker Constellation Brands Inc.
rose 3.1% after the company said its earnings and sales rose above expectations.
McCormick & Co. Inc.
gained 4% after the company’s profits rose as acquisitions and cost-cutting helped boost the spicemaker’s sales.
Pier 1 Imports Inc.
reported a quarterly loss and a decline in sales late Wednesday, sending shares down 8.8%.
shares fell 3.4% after the company’s second-quarter forecast fell short of expectations. The farm-equipment supplier also lowered its annual forecast.
Progress Software Corp.
shares jumped 5.4% following the business software maker’s report of better-than-expected second-quarter earnings.
Other markets: Oil prices
dropped 2%, trading below $49 a barrel. European stocks
continued to rally, gaining for a third session.
Asian stocks ended mostly higher, with Japan’s Nikkei Average
edging up 0.1% and Hong Kong’s Hang Seng Index
were off 0.5% to $1,320.80 an ounce. The ICE U.S. Dollar Index
–Carla Mozée in London contributed to this article.