Stock Market News For June 17, 2016

Benchmarks ended in the green for the first time over the last six sessions with the Dow rebounding from triple-digit losses following a slight reduction in “Brexit” concerns and rate hike fears. Death of a member of British Parliament, Jo Cox helped in reducing concerns regarding “Brexit.” While significant gains in telecom stocks boosted markets, decline in energy sector following drop in oil prices dampened investor sentiment.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.

The Dow Jones Industrial Average (DJI) gained 0.5% to close at 17,733.10. The S&P 500 rose 0.3% to close at 2,077.50. The tech-laden Nasdaq Composite Index closed at 4,844.92, gaining 0.2%. However, the fear-gauge CBOE Volatility Index (VIX) declined 3.8% to settle at 19.37. A total of around 7.3 billion shares were traded on Thursday, higher than the last 20-session average of 6.8 billion. Decliners outpaced advancing stocks on the NYSE. For 49% stocks that declined, 47% advanced.

British Labor Party politician Jo Cox, who was also a member of British Parliament, was shot dead on Market Street in Birstall yesterday. The lawmaker was an active campaigner for the country to remain in the European Union. It is being speculated that the incident will reduce chances of a “Brexit” in June 23’s referendum. U.K’s. Prime Minister David Cameron tweeted that campaigning regarding the referendum has been temporarily stopped following her death.

Separately, indication of delayed rate hike this year also had a positive impact on benchmarks. After deciding to keep federal funds rate unchanged in its two-day policy meeting, the subsequent statements from the Fed and comments from Chairwoman Janet Yellen raised possibilities that rate hike may get delayed in coming months.

Statement following the meeting showed that six of the 17 policymakers forecasted one rate hike this year, compared to only one Fed official taking a similar view in March. Yellen said: "I'm not comfortable to say it's in the next meeting or two, but it could be…It's not impossible that by July, for example, we would see data that led us to believe that we are in a perfectly fine course."

The SPDR S&P Telecom (XTL), which gained more than 1%, emerged as one of major advancing sectors. Key stocks from the sector including, Brocade Communications Systems, Inc. (BRCD), CommScope Holding Company, Inc. ( COMM), Cogent Communications Holdings, Inc. (CCOI ), Verizon Communications Inc (NYSE:VZ). (VZ) and Harris Corporation (NYSE:HRS) ( HRS) gained 1.2%, 2.2%, 1.2%, 1.2% and 1%, respectively.

Moreover, reduced rate hike fears led Utilities Select Sector SPDR (XLU) to gain 0.6%, which was also the biggest gainer among S&P 500 sectors. Key stocks from the sector including, Duke Energy Corporation (NYSE:DUK) (DUK), Xcel Energy Inc (NYSE:XEL). ( XEL), American Electric Power Co., Inc. (AEP), PG&E Corporation (PCG) and NextEra Energy (NYSE:NEE), Inc. ( NEE) gained 1.2%, 1.2%, 1%, 1% and 0.8%, respectively.

However, prices of WTI crude and Brent crude declined 3.9% and 3.8% to $46.21 per barrel and $47.19 a barrel, respectively, which had a negative impact on energy stocks. The Energy Select Sector SPDR (XLE (NYSE:XLE)), which dropped 0.5%, was the only loser among the S&P 500 sectors. Key stocks from the sector including, Pioneer Natural Resources Co. (PXD), EOG Resources (NYSE:EOG), Inc. ( EOG) and Halliburton Company (NYSE:HAL) (HAL) fell 6.1%, 2.7% and 1.8%, respectively.

In economic news, the Labor Department reported that Consumer Price Index (CPI) rose 0.2% in May, less than 0.4% rise in April and consensus estimate of 0.3% gain. However, CPI rose 1% over the past twelve months. Core-CPI also gained 0.2%, in line with the consensus estimate.

Meanwhile, another report from Labor Department showed that initial claims increased 13,000 for the week ending June 11 to 277,000, higher than the consensus estimate of 270,000. However, 4-week moving average registered a decline by 250 to 269,250 for the week. The National Association of Home Builders (NAHB) reported that home builder sentiment index gained 2 points in May to 60 after remaining flat for four consecutive months.

Moreover, the Philadelphia Fed manufacturing index – an indicator of business growth in the region – came in at 4.7 in June, favorably compared to May’s reading of negative 1.8. It was also significantly higher than the consensus estimate of 0.8.