Stocks post minor gains as 'Brexit' vote nears
NEW YORK — The U.S. stock market barely extend its relief rally Tuesday as Wall Street and other global financial markets continued to be dominated by the pending outcome of Britain's vote on Thursday to leave or stay in the European Union.
The Dow Jones industrial average ended up about 25 points, or 0.1%. The broader Standard & Poor's 500 stock index gained 0.3%, and the Nasdaq composite gained 0.1%.
Stocks around the globe built on Monday's sizable gains amid continued hopes that the Brits will vote to "remain" in the 28-nation -- but single market -- EU. A so-called 'Brexit' is viewed as a market negative, as it is likely to spur financial market tumult, cause economic hardship in Britain and other countries and spark a sharp spike in investor uncertainty.
Global markets enjoyed a big rally Monday after polls over the weekend showed the "remain" camp was gaining momentum, causing investors to start pricing in a so-called 'Bremain', and not a 'Brexit', or British exit from the EU. However, polls continue to show a close race.
"All eyes continue to parse the voting data and financial market moves pertaining to Brexit, and that's going to remain the primary driver of the market's this week," Bespoke Investment Group told clients in a research note.
Wall Street is also monitoring testimony by Federal Reserve Chair Janet Yellen before the Senate Banking Committee.
Yellen said in her prepared testimony that the Fed will proceed cautiously with rate hikes due to "considerable uncertainty" in the U.S. economic outlook, citing potential risks from the upcoming Brexit vote and weakness in China.
In a sign of just how high-profile and potentially risky the Brexit vote is to financial markets, billionaire trader George Soros warned Tuesday in an op-ed piece in the Guardian that a vote by Britain to leave the EU would cause grave damage to the living standards in the U.K. and trigger a massive drop in the value of the British currency, the pound. Soros warns that a Brexit could cause a 15% to 20% drop in the pound, which would be a bigger plunge than the so-called "Black Wednesday" plunge nearly 24 years ago.
Despite all the angst, stocks in Europe shot up for a second straight day. The Stoxx Europe 600 jumped 0.9%, the German DAX rose 0.8% and the CAC 40 in Paris gained 0.9%.
The FTSE 100 in London was up 0.6%, after trading in the red for a good part of the session.
The price of a barrel of U.S.-produced crude was trading down about 1.5% per barrel to $48.60.