Stocks climb again, extending rally to a third day

Investors remained in a buying mood Thursday, driving U.S. stocks broadly higher for the third day in a row.

The latest gains added to the market’s rebound from the brief but steep slump that followed Britain’s vote to leave the European Union a week ago.

Although the rally suggests that traders’ anxiety over Britain’s departure from the EU have eased, a surge in U.S. bond prices Thursday signaled many investors remain cautious about the possible long-term implications. As bond prices rose, the yield on the 10-year Treasury note fell to 1.47%.

Consumer staples companies posted the biggest gains. Utilities stocks, a traditional haven for investors seeking less risk, were a close second. Oil prices fell.

“The equity market has realized that the ‘Brexit’ in a vacuum by itself is not a reason to wholesale abandon equities,” said David Schiegoleit, managing director of investments for the private client reserve at U.S. Bank. “But there is still the fear that it becomes contagious with other economies in Europe.”

The Dow Jones industrial average climbed 235.31 points, or 1.3%, to 17,929.99. The Standard & Poor’s 500 index rose 28.09 points, or 1.4%, to 2,098.86. The Nasdaq composite advanced 63.43 points, or 1.3%, to 4,842.67.

The stock market closed out the second quarter with modest gains.

The S&P 500 index advanced 1.9% in the April-through-June period. Much of the biggest gains came from energy stocks, which benefited from a rebound in oil prices, and from utilities and telecom companies, which became more attractive as bond yields declined. The index is up 2.7% this year.

The Dow, which gained 1.4% during the second quarter, is up 2.9% this year. The Nasdaq lost 0.6% in the second quarter and is down 3.3% for 2016.

Trading had a tepid start Thursday but got into rally mode by midmorning, suggesting a resolve among investors to put aside their worries about Britain’s eventual EU exit.

Markets in Europe also extended their rebound from the two-day slump that broke Tuesday. Britain’s FTSE 100 rose 2.3%. The U.K.’s stock market has recouped its losses, though that is largely thanks to a drop in the British currency, which favors earnings for big companies overseas.

Germany’s DAX advanced 0.7%. France’s CAC 40 rose 1%.

The simultaneous rise in prices for stocks and U.S. bonds Thursday was unusual and suggests nervous investors overseas are seeking the relative safety of bonds even as other traders look to ride the U.S. stock market rally further, Schiegoleit said.

“You have not only nerves pushing foreign money into U.S. Treasurys, you also have negative yields in several places around the world, which is forcing capital into the U.S. bond market,” he said.

Another factor: Over 60% of the stocks in the S&P 500 have a dividend yield that’s higher than that of the 10-year U.S. Treasury. That gives even income investors a reason to buy stocks.

The latest batch of company deal news also helped lift U.S. stocks Thursday.

Cable channel Starz climbed 6% to $29.92 after agreeing to be acquired by Lions Gate Entertainment, which owns the “Orange Is the New Black” Netflix series and the “Hunger Games” movies. Lions Gate shed 3.4% to $20.23.

Hershey surged 16.8% to $113.49 after a report that snack company Mondelez made an overture to acquire the candy maker. Hershey said it rejected the offer. Mondelez rose 6% to $45.51.

Care.com shares vaulted 37.9% to $11.68 after Google Capital invested $46 million in the online family care management service.

Earlier in Asia, Japan’s benchmark Nikkei 225 edged up 0.1% and South Korea’s Kospi rose 0.7%. Hong Kong’s Hang Seng index rose 1.5%.

Australia’s S&P/ASX 200 advanced 1.8%.

In energy futures trading, benchmark U.S. crude fell $1.55, or 3.1%, to $48.33 a barrel in New York. Brent crude, used to price international oils, slid 93 cents, or 1.8%, to $49.68 a barrel in London. Wholesale gasoline fell 2 cents to $1.50 a gallon, heating oil shed 5 cents to $1.48 a gallon and natural gas rose 6 cents to $2.92 per 1,000 cubic feet.

In metals trading, gold lost $6.30 to $1,320.60 an ounce, silver went up 22 cents to $18.62 an ounce and copper advanced 1 cent to $2.20 a pound.

The pound slipped to $1.3244 from $1.3431, still down sharply from the pre-‘Brexit’-vote level of $1.50.

The dollar was trading at 103.27 yen, up from 102.56 yen on Wednesday. The euro fell to $1.1077 from $1.1106.

UPDATES:

2:41 p.m.: This article was updated with additional information.

1:23 p.m.: This article was updated with closing prices.

9:03 a.m.: This article was updated with more recent prices and additional information.

This article was originally published at 7:14 a.m.