US stocks stage late-day comeback to end five days of losses
Stocks in the US staged a late afternoon rally to close moderately higher on Thursday, ending a five-day losing streak.
The Dow Jones industrial average rose 92.93 points, or 0.5%, to 17,733.10. It had been down more than 100 points earlier in the day. The Standard & Poor's 500 index rose 6.49 points, or 0.3%, to 2,077.99 and the Nasdaq composite rose 9.98 points, or 0.2%, to 4,844.91.
Investors continued to focus on next week's vote on whether Britain would remain a member of the European Union. Overseas, Japanese stocks plunged 3% after the Bank of Japan decided not to increase its economic stimulus efforts.
Traders are bracing for a tight race in the vote on June 23 on whether to leave the EU. The Bank of England, which kept its rates on hold as well on Thursday, said a vote to leave would likely result in the pound dropping sharply. It would also hurt spending and investment.
"This is going to be a big event. Up until a few weeks ago, the markets were pricing in a probability of the UK leaving the EU at around 20%. Now the chance is roughly 42%," said Richard Turnill, BlackRock's global chief investment strategist. "We are going to see significant volatility ahead of the UK referendum."
As a result, investors have been shifting money into assets considered less risky in times of volatility. High-dividend utility stocks rose nearly 1%. Gold also rose nearly 1% and US government bond yields remain at lows not seen in four years.
"Everyone is focused on the vote. It's all about de-risk right now, taking chips off the table," said Rob Bernstone, a managing director and head of trading at Credit Suisse.
Entertainment conglomerate Viacom jumped sharply in the last hour of trading, closing up 2.85 US dollars, or 6.8 , to 45.05 US dollars, after Sumner Redstone's National Amusements said it had replaced five of Viacom's 11 directors, including chief executive Philippe Dauman. The move came as the mental competency of Redstone, Viacom's controlling shareholder, is being challenged in court.
Meanwhile, drugmaker giant Merck rose 1.41 US dollars, or 2.5%, to 57.50 US dollars after the company said it had positive results in a medical study for its cancer drug Keytruda, which could result in higher sales of the drug.
Japan's central bank once again voted not to further ease monetary policy to help the country's faltering recovery.
The yen jumped nearly 2% against the US dollar, reaching its highest level in two years. Japanese officials have said they may intervene in currency markets if the yen appreciates too much. Japan's economy is heavily reliant on exports, which are hurt when the yen rises sharply in value against other currencies.
As a result of the Bank of Japan's actions, the US dollar fell sharply against the yen, trading at 104.31 yen compared with 105.98 the previous day. The euro fell to 1.1236 US dollars from 1.1268 US dollars.
The price of benchmark US crude oil sank 1.80 US dollars to 46.21 US dollars a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, shed 1.78 US dollars to 47.19 US dollars a barrel in London.
Energy stocks fell along with the price of oil. Transocean, Marathon Oil, and Murphy Oil, all drilling or oil exploration companies, fell 3% to 4% each.
In other energy trading, heating oil fell five cents to 1.42 US dollars a gallon, wholesale gasoline fell four cents to 1.47 US dollars a gallon and natural gas fell two cents to 2.58 US dollars per 1,000 cubic feet.
Gold rose 10.10 US dollars to 1,298.40 US dollars an ounce, silver rose 10 cents to 17.61 US dollars an ounce and copper fell four cents to 2.05 US dollars a pound.