Stocks rallied for a second straight day as the calm that returned to markets following the post-Brexit chaos persisted.
The S&P 500 returned to positive territory for the year, and the UK’s FTSE 100 erased its post-Brexit losses, as did crude oil.
First, the scoreboard:
Dow:17,694.68, +284.96, (1.64%) S&P 500: 2,070.77, +34.68, (1.70%) Nasdaq: 4,779.25, +87.38, (1.86%) 10-year yield: 1.488 (+0.027) WTI crude oil: $49.88, +$2.03, (4.24%)
Puerto Rico will default on Friday – again.The governor of the commonwealth, Alejandro García Padilla, wrote in a CNBC articlethat Puerto Rico would miss some $1 billion in bond payments on Friday as it struggles with the long-term implications of its massive deficits. Hours after García Padilla’s article was published, the US Senate on Wednesday appeared close to passing a bill that would allow Puerto Rico some of the same bankruptcy protections afforded to states. Under the new bill, which is expected to be signed quickly by US President Barack Obama, the commonwealth will have to cut some of its public services and establish an outside board to guide the restructuring. The hottest tech IPO of the year keeps rocketing. Shares of Twilio, which makes cloud-communications tools for software developers, rose 20% on Wednesday. They surged 90% in their market debut last Thursday. Twilio’s gains this week exceeded its lost ground in the Brexit aftermath – about 5% of its value – over the past couple of days. On Monday, CNBC “Mad Money” host Jim Cramer called Twilio a “unicorn” with “real value,” noting that the market “may be willing to pay up for growth again.” Chipotle is fighting to win customers back. The fast-food restaurant is adding chorizo, a spicy pork sausage, to its menu at restaurants nationwide. It’s made only a few menu changes in its 23-year history. The new item is rolling out on Wednesday at select restaurants in in Columbus, Ohio; New York City; Sacramento, California; San Diego, California; Denver, Colorado; and Washington, DC. The company is hoping that the new menu addition will draw back its most loyal customers following an E. coli outbreak that sent the company’s sales plunging. Its shares gained 4% on Wednesday. In economic data, personal income rose 0.2% in May, dropping from the previous month, while personal spending climbed 0.4%, according to the US Commerce Department. Consumer spending is starting the second quarter on a stronger footing than the first, and that points to a stronger pace of growth, which bodes well for a growth bounce back this quarter, said TD Securities’ Millan Mulraine. The core personal consumption expenditures index – which excludes food and energy costs and is the Federal Reserve’s preferred inflation measure – rose 0.2% month-on-month and 1.6% year-on-year. That’s still shy of its 2% target. Pending home sales fell in May for the first time in two years. The National Association of Realtors said that sales fell 3.7%; economists had forecast a drop by 1.1%. Lawrence Yun, the NAR’s chief economist, said that the strong pace of home sales in recent months reduced what was available in May and dragged down contract activity. “There are simply not enough homes coming onto the market to catch up with demand and to keep prices more in line with inflation and wage growth,” Yun said in the release.