logo-loader

US stocks hit record high close after post-Brexit becomes clearer, US data buoys

Last updated: 06:27 12 Jul 2016 AEST, First published: 01:27 12 Jul 2016 AEST

shutterstock_155408990

US stocks closed at a record high on Monday, feeding off the buoyant London bourse after uncertainties over who will become Prime Minister evaporated and investors also continued to lap up strong domestic economic data.

The S&P 500 index closed up 0.34% at 2,137 – its highest close ever – after scaling 2,143 intraday, also its highest level ever. The last time a record was struck was in May 2015.

Investors were still taking direction from bullish June non-farm payrolls data published on Friday.

News that Andrea Leadsom, the last-remaining pro-Brexit Conservative Party contender for the premiership pulled out to make way for Theresa May lifts an air of uncertainty about who will lead Britain out of the European Union, following a referendum vote last month.

May, although a Remainer, was considered the most effective of the politicians to renegotiate a deal for trade, security and foreign relations with the EU. May is uncontested and a new premier is due to be announced by September 9.

The S&P Midcap 400 closed up 0.6% at 1,529, and led by Bank of the Ozarks (NASDAQ:OZRK) up 6.6% at $39.21 after it announced net income for the second quarter of 2016 was a record $54.5mln, a 21.7% increase from $44.8mln for the second quarter of 2015. Diluted earnings per common share for the second quarter of 2016 were a record $0.60, a 17.6% increase from $0.51 for the second quarter of 2015.

The S&P Smallcap 600 ended up 1.1% at 730 – its highest level since June 29, 2015.

Despite the gains by top flight tickers, Twitter (NASDAQ:TWTR) stock nursed losses after broker SunTrust downgraded the company to "neutral" from "buy". The broker said user growth – a nemesis for Twitter - and engagement continue to be "challenged.” Twitter shares closed 2.1% at $17.71.


Midsession

US stocks marked a fresh high at midsession on Monday as Britain’s Brexit fallout was relegated in favour of growing confidence for the US economy in the wake of surprisingly strong non-farm payrolls in June reported last Friday.

The market bellwether S&P 500 was up 0.5% at 2,141. Earlier it hit an intraday high of 2,143. That comfortably topped the previous record of 2,134.72 set in May 2015. The broad-market barometer has rallied by more than 16% from its 2016 lows struck in February, and has more than recovered from the losses sparked by the shock vote by Britons in June to exit the European Union.

Meanwhile, the tech-heavy Nasdaq climbed as much as 0.9% to 5,002.5, briefly topping the 5,000 threshold for the first time this year, but still remained well below the all-time high of 5,231.9 it hit last July.

But it wasn’t just the employment report which offered gusto to traders. The US growth rate may have risen to 2.4% in the second quarter, from 1.1% in the first three months of the year, according to a forecast by the Atlanta Federal Reserve.

In a sign of investors’ hunger for assets that offer regular streams of payments, utilities, telecommunications and consumer staples have posted the biggest gains by a wide margin since the S&P 500 last hit its record high, with all three S&P 500 sectors printing double-digit percentage increases.

The S&P Midcap 400 was up 0.6% at 1,529 and led by Wisdomtree Investments (NASDAQ:WETF), up 7% at $10.42, while the S&P Smallcap 600 gained 1% to 729 and led by Sagent Pharm Inc (NASDAQ:SGNT) up 39.7% to $21.66, after lawyers John & Weaver launched an investigation it the fairness of a proposed sale of the company to Japan’s Nichi-Iko Pharmaceutical Co., Ltd.


Open

Wall Street started the week in the black as positive sentiment spilled over from Friday's upbeat non-farm payrolls.

The Dow Jones Industrial Average kicked off 73 points up at 18,220.

Connor Campbell at Spreadex said: "That now leaves the Dow at new 2016 highs, beating the levels struck in mid-April, with the index only 150 points away from its all-time peak."

The pound was up 0.18% against the dollar at US$1.2975.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

4 hours, 38 minutes ago