Investing.com -- U.S. stocks staged a dramatic comeback on Thursday, as yields on the U.S. 10-Year bounced off four-year lows and the dollar pared sharp gains while widespread Brexit concerns eased and continued inaction by top central banks remained in focus.
The Dow Jones Industrial Average gained 92.93 or 0.53% to 17,733.10, while the S&P 500 Composite index added 6.49 or 0.31% to 2,077.99, each halting a five-day losing streak. At session lows, the Dow crashed as much as 168 points, as continued sell-offs among financial stocks in the euro area spilled over into global financial markets. It came as implied volatility on the British Pound hovered near record-highs, as the Bank of England expressed significant concerns on the potential of a "Leave," vote next week at a highly controversial public referendum. On Thursday afternoon, the Pound Sterling recovered after betting odds from the U.K. sportsbook Betfair indicated that there is a 65% chance the "Remain" vote will prevail next week.
At the same time, yields on U.S. 10-year Treasuries rebounded from four-year lows of 1.518%, while oil recovered from early losses in Thursday's session helping trigger the rally among equities. Consequently, the CBOE Vix Volatility Index jumped more than a point to an intraday-high of 22.77 on Thursday, its highest level in four months. The Vix is up approximately 40% this week, on pace for its strongest weekly gain since January.
Meanwhile, the NASDAQ inched up 9.99 or 0.21% to 4,844.92, turning positive late in the session. On the S&P 500, nine of 10 sectors closed in the green as stocks in the Telecom and Utilities industry led. Stocks in the Energy industry, the lone sector to close in the red, fell by more than 0.25%. At one point on Thursday, Utilities hit a 52-week high.
Investors also continued to digest Wednesday's decision from the Federal Reserve when the U.S. central bank held short-term interest rates steady for their fourth consecutive meeting. On Wednesday afternoon, the Federal Open Market Committee (FOMC) left the target range on its benchmark Federal Funds Rate unchanged at a level between 0.25 and 0.50%. The FOMC also lowered its outlook for future rate increases in each of the next two years. As a result, the CME Group's (NASDAQ:CME) Fed Watch tool lowered the probability of a Fed rate hike in both July and September. Any rate hikes by the Fed this year are viewed as bearish for equities, as investors look to capitalize on higher yields in Treasuries.
The top performer on the Dow was Merck & Company Inc (NYSE:MRK), which added 1.41 or 2.51% to 57.50. Earlier, Merck said that advanced lung cancer patients undergoing its Keytruda immuno-therapy trial reported better survival rates than counterparts given Chemotherapy programs. The worst performer was Nike Inc (NYSE:NKE), which fell 0.84 or 1.55% to 53.47. Shares in Nike are down roughly 14% after hitting all-time record highs last year.
The biggest gainer on the NASDAQ was Viacom Inc (NASDAQ:VIA), which surged 2.85 or 6.75% to 45.05. On Thursday afternoon, Shari Redstone, the daughter of Viacom controlling shareholder Sumner Redstone, ousted five members of the company's Board of Directors including CEO Philippe Dauman. Redstone's privately-held movie company, National Amusements, which owns roughly 80% of Viacom's voting shares, also dismissed directors George Abrams, Fred Salerno and William Schwartz subject to a ruling by a Delaware court. The worst performer was American Airlines Group (NASDAQ:AAL), which plunged 1.35 or 4.43% to 29.14. Earlier, American Airlines tumbled to a fresh 20-month low after analysts at Bank of America Merrill Lynch (NYSE:BAC) downgraded the airlines giant to a sell, amid considerable debt concerns.
On the New York Stock Exchange, advancing issues outnumbered declining ones by a 1,524-1,513 margin.