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6/29/16

Global Economy: Brexit and Terrorism no match for Wall Street Casino bouncing back after two-day Brexit rout

Wall Street bounced back on Tuesday, recouping some recent losses, as investors sought cheap assets after a two-day equities rout sparked by Britain's decision to leave the European Union.

U.S. indexes joined stock markets around the world in the rebound after global equity markets had shed $3 trillion in value in the two days following Britain's shock vote, according to S&P Dow Jones Indices. Investors also pointed to solid U.S. economic data as helping to stabilize stocks.

Financials .SPSY and tech stocks .SPLRCT, hit hard in the wake of the referendum, were among the top gaining sectors on Tuesday.

"People are starting to say maybe this is going to take longer than they thought and maybe the impacts on the U.S. market won’t be nearly as great as feared," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey. "So I think you’ve seen a bit of bargain-hunting."

The Dow Jones industrial average .DJI rose 269.48 points, or 1.57 percent, to 17,409.72, the S&P 500 .SPX gained 35.55 points, or 1.78 percent, to 2,036.09 and the Nasdaq Composite .IXIC added 97.42 points, or 2.12 percent, to 4,691.87.

All 10 S&P sectors finished higher. Energy shares .SPNY gained 2.6 percent, leading all groups, supported by higher oil prices.

Major U.S. indexes had posted their worst two-day decline in 10 months following the British referendum.

Investors are still bracing for volatility in the coming weeks amid uncertainty about how Britain will pursue its EU exit, with some pointing to more possible downside. The S&P 500 was within 17 points of its May 2015 record high last Thursday.

Still, the CBOE Volatility Index .VIX, the favored gauge of investor anxiety, fell about 21 percent to trade close to where it was before the Brexit vote. It was its largest one-day percentage decline since August 2011. 

All this seems curious and questionable when putting it into perspective.

Read more: Wall Street bounces back after two-day Brexit rout | Reuters

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