Day 2 of Brexit bounce: Dow climbs 285
Day 2 of the Brexit rebound saw the Dow jump 285 points Wednesday as investors begin to downplay the economic fallout caused by Britain's vote to leave the European Union.
The Dow Jones industrial average built on its nearly 270-point gain Tuesday, climbing 1.6%. The blue chips saw a two-day gain of 554 points -- their best back-to-back point climb since back in August, 10 months ago.
While the Dow has not erased all of the 871 points it lost Friday and Monday, it did climb back into positive territory for the year.
The S&P 500 also bounced back for a second day, putting it back in the black for the year as well. The benchmark large-company stock index ended 1.7% higher, building on Tuesday's nearly 2% rebound. The technology-packed Nasdaq composite jumped 1.9%.
The shock of the Brexit vote appears to be wearing off as investors reassessing the magnitude of the political and economic crisis in the U.K. and EU conclude that it likely won't have as big or as dire an impact on the global economy as first feared.
The level of fear and investor risk aversion is abating, a bullish shift illustrated by another day of strong gains for stocks in London and Europe, as well as a second day of solid gains for the British pound, which had been pummeled and knocked down to a 31-year low versus the dollar after the 'Brexit' vote.
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Wall Street is beginning to price in a 'Brexit' outcome that falls in the middle of "it doesn't matter at all" to "it's going to bring about a global economic meltdown," Andrew Adams of Raymond James, told clients in a research note.
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Adams stressed that the U.K. and EU are not going to stop trading with each other or the rest of the world. He also pointed out that it will be a gradual, multi-year process for Britain to exit the EU, and noted that U.K. accounts for less than 4% of U.S. exports.
Stocks in Europe were moving higher. The FTSE 100 in London shot up 3.6% to 6360.06 and has erased all of it's losses from the two days after the 'Brexit' vote. The broad Stoxx Europe 600 was 3.1% higher.
Equities also rallied in Asia, with shares of Japan's Nikkei 225 closing up 1.6% and stocks in Hong Kong rising 1.3% and shares in mainland China jumping 0.7%.