Stocks extended their post-Brexit recovery rally into a third session on Thursday as hopes rose of further monetary easing from global central banks.
The S&P 500 was up 1%, the Dow Jones Industrial Average gained 1%, and the Nasdaq rose 0.9%.
The gains still weren't enough to erase a rough month, though. The S&P 500 remained 0.3% lower for June, pulled lower by recent Brexit drama and signs of a increasingly cautious Federal Reserve mid-month. The benchmark index was on track to close out the second quarter with gains of just more than 1%.
"We're likely going to see some skeleton crews on Wall Street as many usually take long holiday weekends to enjoy the summer around holidays," said James Stanley, currency analyst at DailyFX. "This is relevant for traders because this could mean lower levels of liquidity tomorrow and on Monday, and given the potential for increases in volatility around the end of second quarter, this could make for a messy environment."
Crude oil prices closed lower on Thursday, pulling back from a two-day rally. The commodity enjoyed its best gains in two months on Wednesday after a bounceback from the Brexit shock and a larger-than-expected decline in domestic inventories. The rally pushed it within reach of the psychologically $50-a-barrel level.
West Texas Intermediate crude oil closed 3.1% lower at $48.33 a barrel on Thursday. However, the commodity has risen 16.6% in the year to date thanks to disruptions to global oil production, particularly in Canada, Nigeria and Venezuela.
The U.K. likely will require further easing in monetary policy to support its economy in the wake of the Brexit news, Bank of England Gov. Mark Carney said Thursday. Carney noted that the U.K. is suffering from "economic post-traumatic stress disorder" after the results of the Brexit referendum came in on Friday.
A three-day rally on Wall Street has been partially fueled by increased hopes of monetary stimulus from the world's central banks. The chances for a rate hike from the Fed this year dramatically fell after the Brexit decision.
The S&P 500 bounced back into positive territory for 2016 on Wednesday after seeing red in a major selloff earlier in the week. The benchmark index has recovered more than half of the losses suffered Friday and Monday. Global markets had sold off on the shock of the United Kingdom's vote to exit the European Union last week.
Such a steep descent over just two sessions presented traders with opportunities to pick up heavily oversold equities, particularly given increased chances of monetary stimulus from global central banks. The protracted time for an exit from the EU -- likely at least two years -- also gave investors a reason to buy back in in the near term.
Economic activity in the Chicago area topped estimates in June with improvements seen in both production and new orders. Chicago PMI returned to expansion territory, climbing to 56.8 in June and marking its best level since January 2015. Analysts expected the measure to tick up to 50.5.
The number of new claims for unemployment benefits in the U.S. increased by 10,000 to 268,000 in the past week, according to the Department of Labor. The four-week claims average, a less-volatile measure, was unchanged at 266,750.
Hershey (HSY - Get Report) unanimously rejected a takeover offer from Mondelez International (MDLZ - Get Report) and showed no interest in any further discussion. Mondelez reportedly offered Hershey $107 a share, a 10% premium to its Wednesday close.
The Federal Reserve said 31 out of 33 bank capital-return plans had been approved. Among them, Morgan Stanley (MS - Get Report) authorized a $3.5 billion stock buyback plan and hiked its quarterly dividend to 20 cents a share from 15 cents, Capital One (COF - Get Report) said it expects $2.5 billion in stock buybacks by the second quarter of 2017, and U.S. Bancorp (USB - Get Report) announced a $2.6 billion repurchase program.
Though Morgan Stanley's capital-return plans were approved, the Fed still criticized weaknesses in the way it identified risks tied to dividend and share buyback decisions. Morgan Stanley will have to resubmit documents to the Fed by the end of the year outlining how they have rectified the issues.
LionsGate (LGF) agreed to purchase Starz (STRZA) for $4.4 billion. The long-rumored pairing brings together two companies in which billionaire executive John C. Malone has stakes. LionsGate offered $18 in cash and 0.6784 of its shares for each Starz Series A share, representing a 14% premium to Starz's Wednesday close.