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Midday Market Update

Stocks Higher as Investors Bet Britain Will Stay in EU

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U.S. Market
U.S. stocks rallied Thursday, as polls indicated that the vote on whether the United Kingdom will vote to remain a member of the European Union were slightly favoring a "stay" vote

At midday the Dow and the S&P 500 were up 0.9%, and the Nasdaq was up about 1.2%.

Stocks on the Move
Shares of  Macy's (M) rose 2.4% after the retailer announced that Jeff Gennette will succeed Terry Lundgren as CEO in the first quarter of 2017, with Lundgren remaining as executive chairman. Although Morningstar equity analyst Bridget Weishaar says that a new perspective and leadership could be "invigorating," she notes that we do not think Macy’s recent struggles are the result of poor leadership. "We think the department store sector is the most exposed to the e-commerce threat in the apparel industry, as brand-name merchandise can often be found at multiple retailers, forcing companies to compete on price. The lack of a competitive advantage is the basis for our no-moat rating,"  Weishaar said.

Shares of  Red Hat Inc (RHT) slid 2.7% today after the open-source software firm reported that first-quarter sales came in above expectations, but suggested growth may cool for the rest of the year. "We maintain our narrow moat rating and $80 fair value estimate, and shares look fairly valued after rallying roughly 30% over the past few months,"  said Morningstar's Rodney Nelson.

Foreign Markets
European stocks rallied today as U.K. voting was under way. The FTSE 100 was up 1.2%, Germany's DAX gained 1.9%, and the Paris CAC gained 2.0%.

Asian markets were mixed. The Shanghai Composite shed 0.4%, the Nikkei 225 rose 1.1%, while the Hang Seng was up 0.4%. 

Karen Wallace does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.