Stocks rallied through the trading day on Thursday. The Nasdaq crossed its closing high, and the S&P 500 came within eight points of its high.
First, the scoreboard:
- Dow: 18,102.65, +52.48, (0.29%)
- S&P 500: 2,122.09, +14.69, (0.70%)
- Nasdaq: 5,154.45, +55.51, (1.09%)
And now, the top stories on Thursday:
- The European Central Bank raised its emergency liquidity assistance to Greek banks by €900 million ($US977.58 million.) ECB president Mario Draghi announced the offer at a news conference that focused more on Greece than on monetary policy. The banks have been shut since June 29 as part of capital controls, and a senior banker told Reuters that they will reopen on Monday.
- In economic data, initial jobless claims fell for the first time in a month to 281,000 last week, after a spike to 297,000 the week earlier. The four-week average rose 3,250 to 282,500. In a note to clients after the release, Pantheon Macroeconomics’ Ian Shepherdson wrote, “after 18 straight weeks below 300K, it’s clear that the trend in layoffs is very low indeed, close to all-time lows when adjusted for the rising population over time.”
- The Philadelphia Fed‘s reading of manufacturing activity in the region came in at 5.7 for July, much worse than the consensus forecast of 12.0. “This weaker reading is in line with the ISM-adjusted version of the July Empire State index (49.9, previous: 51.9),” Barclays noted. “Together, these readings imply a muted tone for Northeast regional manufacturing activity in July.”
- Homebuilder sentiment rose to the highest since November 2005, with the National Association of Homebuilders’ index climbing to 60 from 59 in June. The NAHB said the housing recovery should continue into the second half of the year, but there are challenges with staff and lots shortages.
- Netflix exploded 18% to an all-time high after the company posted quarterly results above expectations Wednesday. Yesterday, Netflix shares started trading at the new adjusted share price, following the 7-for-1 split. The stock climbed to as high as $US116, well above its split-adjusted price. The company added 3.3 million subscribers in the second quarter.
- Goldman Sachs reported earnings above expectations, although legal fees caused a dent. The bank posted earnings per share (EPS) of $US1.98 on revenue of $US9.07 billion. Excluding legal fees, adjusted EPS was $US4.75. CEO Lloyd Blankfein said uncertainty in the EU dampened investor confidence although things are largely rosy.
- Citigroup also posted better-than-expected results, with adjusted EPS of $US1.45 and revenues of $US19.5 billion. Michael Corbat, CEO of Citigroup said in the statement, “we grew loans and deposits in constant dollars in Global Consumer Banking, while also gaining wallet share among target clients in our Institutional Clients Group.”
- Two coal producers filed for bankruptcy. Walter Energy filed for Chapter 11 bankruptcy, and Alpha Natural Resources was preparing to do the same, according to the Wall Street Journal; its shares were delisted from the New York Stock Exchange due to an “abnormally low” share price, according to Briefing.com. The coal industry has faced strong competition from natural gas, and has been oversupplied.
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