US stocks managed to snap a five-day losing streak at the Thursday close, as the S&P 500 staged a reversal in spite of sharply lower oil prices.
The benchmark US equity index rose for the first time in six days on Thursday, joining a global rotation back into risk assets.
The S&P 500 rose by 0.3% to 2,078, shedding losses of as much as 1% earlier in the session.
The advance was led by so-called defensive stocks that are favoured by investors for their fat dividend yields, and are seen as a haven during times of turbulence. Telecommunications, utilities and consumer staples posted the largest gains.
On the other end of the spectrum, economically-sensitive stocks lagged behind, with the energy sector notching a mild decline and technology and industrials logging the slimmest advances of the major S&P 500 sectors.
Smaller stocks managed to pare losses, but none of the tickers went higher on the day. The S&P Midcap 400 was down 0.08% at 1,478, while the S&P Smallcap 600 dropped by 0.1% to 703 and the wider small-cap Russell 2000 shed 0.1% to 1,148.
The US oil benchmark West Texas Intermediate closed down 4.14% at $46.02, setting itself up for a further fall into $45 territory in the Friday session.
Unsurprisingly, midcap declines were led by energy stocks Sm Energy (NYSE:SM) and Wpx Energy Inc (NYSE:WPX).
Midsession
US shares were flat-to-lower at midsession on Thursday as concerns that Britons will vote in favour of quitting the European Union continued to send shockwaves while oil prices made a strident fall.
Despite the protests of the Federal Reserve’s Janet Yellen, as well as repeated warnings from the Bank of England today, the latest opinion poll bears out that voters are not listening to those protests.
Britain’s anti-EU ‘Leave’ campaign has increased its lead by seven points, rushing ahead of its rivals to 45%, according to a poll by Survation and IG on Thursday.
With just a week before the referendum, the Leave camp increased its lead from 38%, with Remain falling two points to 42%, in a phone survey from the company carried out on June 15.
It is the first time the Brexit camp has been in front since the polling began from Survation in February.
The S&P 500 bellwether was flat at 2,071, while the S&P Midcap 400 lost 0.4% to 1,474, and led by weakness in Sm Energy (NYSE:SM), down 9.4% to $26.73, in the wake of weaker oil prices.
Cyclical stocks took the biggest beating on the day, with the S&P 500 energy sector falling by more than 2%, and financials, industrials, materials, and technology all falling by more than 1%.
Oil prices came off sharply. The US benchmark West Texas Intermediate was down 3.5% at $46.34. A week ago oil was closing in on $52 a barrel.
The picture was gloomier still among small-cap stocks. The S&P Smallcap 600 lost 0.6% to 699, led by Korn Ferry International (NYSE:KFY), down 19.7% to $22.17 – a day after announcing strong Q4 earnings. The sell-off appears to be profit-taking.
Korn Ferry were the placement agents for Robert Cook who will become regulator FINRA chief later in 2016, as Proactive Investors reported on Monday. Read more.
But there was also some M&A chatter this session. Could Netsuite (NYSE:N) or Ultimate Software (NASDAQ:ULTI) be the next big tech takeover? That was the chatter among traders after a Proactive Investors report suggested the UK’s Sage PLC (LON:SGE), among others might be a suitor post-Microsoft/LinkedIn tie-up. Read more.
Netsuite shares were down 1.26% at $77.75, while Ultimate Software was up 0.5% at $206.04.