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Bob Carey
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  Stocks Week Ended June 24, 2016
Posted Under: Weekly Market Commentary
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U.S. stocks ended the week with their biggest one day drop in 10 months after 52% of UK voters decided in a referendum to exit the European Union.  Before plunging 3.59% Friday, the S&P 500 had returned over 2% for the week through Thursday as the general consensus believed the U.K. would vote to remain in the European Union.  The vote sent shock-waves through the global economy as investors sold risky assets around the world on concerns the Brexit will hinder global growth. The Euro Stoxx 50 Index fell 8.62% and the FTSE 100 Index declined by 3.15% following the vote.  In other news, all 33 of the biggest U.S. banks passed the Federal Reserve's stress test.  Each bank is put through a number of hypothetical tests to examine if they have enough capital to weather a severe economic shock.   In economic news, durable goods orders declined by 2.2% and new homes sales declined after reaching an eight-year high last month.  Turning to stock news, Werner Enterprises fell after pre-announcing disappointing quarterly results on higher contractor costs and muted demand.   Whiting Petroleum lost ground after announcing plans to convert existing debt into mandatory convertible notes to improve the balance sheet.   HP Inc.  reduced its free cash flow guidance for the year on higher investment in the printing business.  In merger news, Telsa Motors, Inc. offered to buy SolarCity Corp. for nearly $3 billion dollars as CEO Elon Musk of Tesla Motors, Inc. and major shareholder of both companies stressed the importance of combining energy storage, solar power and electric cars.  Looking ahead to the future, investor sentiment will likely drive the market in the near term as implications of the Brexit are digested by the market.
Posted on Monday, June 27, 2016 @ 8:06 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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