Stocks Surge To Close Out June With Best 3-day Gain In 4 Months

U.S. stocks rose for a third session on Thursday on mounting expectations for more accommodative policies from global central banks following the U.K.'s vote to leave the European Union last week.

The S&P 500 climbed 28.09 points, or 1.4%, to close at 2,098.86, with all 10 sectors higher, led by a 2.2% rise in consumer-staples stocks.

The Dow Jones Industrial Average rose 235.31 points, or 1.3%, to finish at 17,929.99, led by a 3% jump in General Electric Co. (GE). The Nasdaq Composite gained 63.43 points, or 1.3% to close at 4,842.67.

The gains were the best three-day climb for the main stock-market gauges since Feb. 17, according to Dow. Jones data. All three indexes are near the levels they were trading at ahead of last week's U.K. referendum as initial jitters over Brexit subsided.

"We are clawing back from the losses after Brexit as investors realized that it was not the watershed event that they thought it was," said James Abate, chief investment officer at Centre Asset Management LLC.

Markets were boosted by reports indicating the European Central Bank is weighing changes to its bond-buying program, while "the Bank of England also said they are all in," said Joe Saluzzi, co-head of equity trading at Themis Trading.

The European Central Bank is considering changing the rules regarding the types of bonds it can buy as part of its stimulus package amid concerns it could run out of securities to buy under current stipulations  according to Bloomberg News. The report followed comments from Bank of England Gov. Mark Carney, who indicated the central bank is poised to further ease monetary policy to combat an expected economic slowdown as the country works its way through Brexit.

"This kind of news generally only has a short-term impact on the markets," said Jeffrey Saut, chief investment strategist at Raymond James.

The three-day rally pushed the S&P 500 and the Dow Jones Industrial Average back into positive territory for the year. Both the large-cap and blue-chip indexes were higher in the second quarter and the tech-laden Nasdaq was off 0.6%. For the month of June, the Dow edged up 0.3% while the S&P 500 was fractionally lower and the Nasdaq shed 1.8%.

From a technical-analysis perspective, "the longer-term trend [for the S&P 500] remains up since February," said to Frank Cappelleri, technical analyst at Instinet, in emailed comments. But the index "is still searching for direction in the short-term," Cappelleri said. "While the [S&P] has had it chances to break out (and down) multiple times over the last three months," he said.

The market's winning streak may run out of steam on Friday following three sessions in a row of more than 1% gains.

"We got back everything we lost [after Brexit] and with the weekend coming up, investors are getting nervous," said Saluzzi.

And although the U.K.'s FTSE 100 has erased its post-Brexit slide and U.S. benchmarks this week logged their largest two-day jump since February, this doesn't change the fact that the stock market is trading at historically high valuations amid continuing political uncertainty, said Jeff Carbone, managing director at wealth manager Cornerstone Financial Partners.

"Get ready for continued volatility," he said.

Economic docket:A measure of Chicago-area economic activity surged in June on a big advance in the number of purchasing managers, indicating improving production and new orders.

Stocks to watch:Hershey Co.(HSY) rejected a buyout bid from Mondelez International Inc.'s(MDLZ), noting "it provided no basis for further discussion between Mondelez and the company." Mondelez offered to pay $107 for each Hershey share, through a mix of cash and stock. Hershey soared 17% and Mondelez jumped 6%.

Yahoo Inc.(YHOO) rose 1.9% as shareholders held their annual meeting.

Shares of Lions Gate Entertainment Corp. (LGF) shed 3.4% following an agreement to be purchased by Starz(STRZA)for $4.4 billion in cash and stock. Starz's shares popped 5.9%.

Wal-Mart Stores Inc.(WMT) climbed 0.8% after announcing Thursday it is launching Wal-Mart Pay in 11 more states, making its mobile pay service available in more than 500 new stores.

Darden Restaurants Inc. (DRI), whose chains include Olive Garden and The Capital Grille, fell 4% after the company posted a rise in quarterly profit while sales missed expectations. Darden did raise its dividend by 12%.

Liquor and beer maker Constellation Brands Inc. (STZ) rallied 3.8% after the company said its earnings and sales rose above expectations.

McCormick & Co. Inc.(MKC) rose 3.9% after the company's profits rose as acquisitions and cost-cutting helped boost the spicemaker's sales.

Pier 1 Imports Inc.(PIR) reported a quarterly loss and a decline in sales late Wednesday, sending shares down 5.5%.

Tractor Supply Co.(TSCO) shares fell 4.2% after the company's second-quarter forecast fell short of expectations. The farm-equipment supplier also lowered its annual forecast.

Progress Software Corp.(PRGS) shares jumped 9% following the business software maker's report of better-than-expected second-quarter earnings.

Other markets: Crude-oil prices , which posted their biggest gain on Wednesday since early April, turned south to trade down more than 3%.

European stocks continued to advance, gaining for a third session. Asian stocka ended mostly higher, with Japan's Nikkei Average edging up 0.1% and Hong Kong's Hang Seng Index gaining 1.8%.

Gold futures were off 0.5% to $1,320.60 an ounce. The ICE U.S. Dollar Index added 0.2%.