People in Canada carrying out online stock trading in US stocks would have noticed gains made by the US stock markets.


Positivity Continues at Wall Street


Wall Street has remained positive for the third straight day on Thursday, the last day in June. It has to do with the great buying mood of investors. These gains cemented the feeling that the market has rebounded from the steep decline it experienced for a short period following the results of the Brexit referendum.


Dow Jones closed at 17,929.99, gaining 235.31 points, equivalent to 1.3%. NASDAQ closed at 4,842.67, and gained 63.43 points, 1.3%. The Standard & Poor 500 index gained 1.4% or 28.09 points to end at 2,098.86. There was a rise in US bond prices though, which probably indicated that many of the investors continued to be cautious regarding the long-term implications of the Brexit vote. The 10-year Treasury note yield, however, fell to 1.47%.


Modest gains were experienced by the stock market. In the period from April-June, the S&P 500 index could add 1.9% with a significant part of the greatest gains coming from the energy stocks. These benefited from the rebounding of the oil prices. Telecom and utilities companies also posted gains, and these stocks became attractive as the bond yields experienced a decline. In the whole year thus far, the S&P 500 index has risen 2.7%. The Dow could gain 1.4% in the second quarter and has risen 2.9% this year while the NASDAQ lost 0.6% in Q2 and has been down 3.3% in the first half of this year.


Factors Contributing to the Positivity


There can be many factors contributing to this generally positive response, once you analyze the various traits that marked Thursday:


  • In fact, trading was sluggish to start with but it was only by midmorning that the rallying began, which would suggest that investors gradually began to put their Brexit worries behind and strengthen their resolve.
  • However, the fact that the prices of US bonds also rose along with stocks probably indicates that there are nervous investors overseas and are therefore seeking solace in the relative safety that bonds offer even as others seek to benefit from the rising US stocks.
  • Another factor could be the fact that there were more than 60% of the S&P 500 stocks with a dividend yield greater than what you’d find in the 10-year US Treasury, which gives investors a strong argument to buy stocks since bond yields fell.


Finally, European markets also continued to rebound from the earlier Brexit-induced two-day slump. The FTSE in UK rose 2.3%. With the pound dropping, the British stock market has been able to recoup its losses since it favors big multinational company earnings. CAC 40 in France rose 1% while Germany’s DAX rose 0.7%.


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