US stocks edge higher as Brexit rally cools

New York - US stocks eked out modest gains early Thursday as investors weighed the volatile political environment in Britain one week after Britain's vote to quit the European Union.

The Wall Street action echoed cooling gains in European markets following a strong two-day rebound spurred by receding fears about the Brexit's impact on the global economy.

About 45 minutes into trade, the Dow Jones Industrial Average was up 0.3% at 17 743.10.

The broad-market S&P 500 rose 0.2% to 2 073.96, while the tech-heavy Nasdaq Composite edged up 0.1% to 4 785.37.

Patrick O'Hare at Briefing.com noted that between last Friday and Monday, the S&P 500 fell 5.3%, and between Tuesday and Wednesday it gained 3.5%.

"The prevailing narrative right now is that this week's turn of events suggests the fallout from the Brexit vote isn't going to be as bad as feared - certainly not for the US anyway," he said.

"It would be a mistake, though, to think the Brexit impact is over and done."

British politics was again roiled following the June 23 EU referendum. Top Brexit campaigner Boris Johnson, a former mayor of London, shocked the country Thursday by taking himself out of the Conservative Party race to succeed Prime Minister David Cameron, who resigned last week after the Brexit victory.

Bank stocks, which have been a key driver of Wall Street's rebound the past two days, were mostly lower following the Federal Reserve's announcement after markets closed the prior day that it had approved the plans of 30 of 33 big banks to return capital to shareholders.

Several banks, including Bank of America, Citigroup and JPMorgan Chase, announced new dividend increases or plans to make stock repurchases following the Fed's review. Dow member JPMorgan rose 0.1%, Bank of America slipped 0.1 percent and Citigroup lost 0.5%.

The Fed failed the US operations of Germany's Deutsche Bank and Spain's Santander. US-traded Deutsche shares dived 3.3% and Santander shed 2.3%.

Lionsgate, the Hollywood studio known for its "Hunger Games" film franchise, fell 0.7% after unveiling a deal to buy the Starz pay television group for $4.4bn.