U.S. stocks suffer big weekly losses on Brexit vote

U.S. stocks slumped in the week as Britain surprisingly voted to leave the European Union (EU) in a historic referendum.

For the week, all three major indices suffered big losses, with the Dow, the S&P 500 and the Nasdaq dropping 1.6 percent, 1.6 percent and 1.9 percent, respectively.

The Britain's EU referendum was the spotlight throughout the week. U.S. stocks climbed for most of the first four sessions of the week, as investors bet the U.K. would remain in the EU.

Polls released over the last weekend showed those wanting to stay in the EU held a slim majority over the Leave campaign. The polls indicated a swing back to "Remain" after the killing of British politician Jo Cox.

However, the Leave camp won Britain's Brexit referendum on Friday morning by obtaining nearly 52 percent of ballots, pulling the country out of the 28-nation European Union after its 43-year membership.

The stunning referendum results sent global markets on a wild descent, and were seen by many economists as a threat to global economic stability.

In late Friday trading, the Dow Jones Industrial Average tumbled 611.21 points, or 3.39 percent, to 17,399.86. The S&P 500 slumped 76.02 points, or 3.60 percent, to 2,037.30. The Nasdaq Composite Index plunged 202.06 points, or 4.12 percent, to 4,707.98.

European equities nosedived Friday on the stunning referendum results. German benchmark DAX index at Frankfurt Stock Exchange dived 6.82 percent in the early trading, while French benchmark index CAC 40 sank 8.04 percent.

In Asia, Tokyo shares also plummeted Friday on the results, with its benchmark Nikkei stock index losing nearly 8 percent, while Chinese benchmark Shanghai Composite Index dipped 1.30 percent to 2,854.29 points.

"The market reaction was bigger than it might have been if traders had not been so confident the UK would remain," said Chris Low, chief economist at FTN Financial.

Meanwhile, Federal Reserve Chair Janet Yellen's testimony before the Congress was also in focus, which took place on Tuesday and Wednesday.

The equity market was supported during the two sessions as Yellen reiterated the U.S. central bank's cautious approach to raise interest rates in view of an uncertain U.S. economy.

She pointed out "considerable uncertainty" about the U.S. economic outlook, which includes slow job gains, weak investment, slow productivity growth, and vulnerabilities in the global economy.

"Proceeding cautiously in raising the federal funds rate will allow us to keep the monetary support to economic growth in place while we assess whether growth is returning to a moderate pace, whether the labor market will strengthen further, and whether inflation will continue to make progress toward our 2 percent objective," Yellen said.

On the economic front, U.S. existing-home sales sprang ahead in May to their highest pace in almost a decade, according to the National Association of Realtors Wednesday.

Total existing-home sales grew 1.8 percent from a downwardly revised 5.43 million in April to a seasonally adjusted annual rate of 5.53 million in May, the highest reading of this measure since 2007.

U.S. sales of new single-family houses in May 2016 were at a seasonally adjusted annual rate of 551,000, missing market estimates, said the Commerce Department Thursday. This is 6.0 percent below the revised April rate of 586,000.

New orders for manufactured durable goods in May decreased 5.3 billion U.S. dollars, or 2.2 percent, to 230.7 billion dollars, the Commerce Department announced Friday.