Brexit is two words ‘British exit,’ coined in response to Britain exiting their membership with the European Union.
Britain already uses separate currency than the rest of the EU, the pound. After the outcome, it at one point fell more than 10 percent, though it has since slightly recovered. Another outcome of the vote is Britain’s Prime Minister David Cameron, who advocated for staying in the EU, resigned this morning.
U.S. stocks plunged more than 3 percent Friday to end in the red for the year so far after Britain surprised markets by voting to leave the European Union.
The Dow Jones industrial average closed down about 611 points, the eighth-largest point loss ever. On a percentage basis the Dow and S&P had their worst day since August 2015, while the Nasdaq composite’s 4.1 percent decline was the index’s worst since August 2011.
Financials dropped 5.4 percent in their worst day since August 2011 to lead nine S&P 500 sectors lower. On the contrary for investors, utilities, telecoms and REITs are benefiting from the continuing low rates.