DOW GAINS 320: Here's what you need to know

Stocks had a huge day. The S&P 500 came within 100 points of its all-time high, and the Dow gained nearly 2%. Several stocks, including McDonald’s, Home Depot, and Kellogg hit all-time highs in trading.

The euro went in the other direction, after the European central bank signalled that more quantitative easing could be on its way.

First, the scoreboard:

  • Dow: 17,499.35, +330.74, (1.93%)
  • S&P 500: 2,053.74, +34.80, (1.72%)
  • Nasdaq: 4,917.42 +77.30 (1.60%)

And now, the top stories on Thursday:

  1. The euro sank nearly 2% to the weakest level in about four weeks, to as low as 1.1109. The European Central Bank announced its decision to keep interest rates unchanged, as expected. And then, ECB president Mario Draghi said the quantitative easing program was “proceeding smoothly” and will be reevaluated in December. This was a signal to markets that the ECB could balloon its QE program. That would be bearish for the euro.
  2. McDonald’s reported its first quarter of positive same-store sales in two years. Sales at stores open for at least a year rose 0.9% in the US, and 4% worldwide. The company said that the new crispy buttermilk chicken sandwich helped lift sales. Its adjusted earnings per share of $US1.40 beat by $US0.12. Shares rallied my as much as 8% to an all-time high.
  3. Valeant will hold a conference call on Monday to address all the allegations made by a short-selling research firm. CEO Michael Pearson and a number of board members wil be on the call, with ten Valeant execs in all. On Wednesday, Citron Research asked whether the pharmaceutical giant was like Enron. It accused Valeant of using Philidor and other specialty pharmacies to create fake invoices for ghost transactions. Citron’s Andrew Left, who penned the scathing report, had an explosive interview on Bloomberg TV in which he advised investors not to listen to him and do their own homework.
  4. Under Armour reported more than a billion dollars in revenues for the first time. Its third-quarter revenues totaled $US1.2 billion, and adjusted earnings per share came in at $US0.45, both beating estimates. Footwear sales increased 61% to $US196 million as it made more running and basketball shoes available. The active-wear retailer raised its outlook on full-year net revenues to about $US3.91 billion from $US3.84 billion.
  5. Build-A-Bear shares dropped by as much as 7% after the company recalled its Starbrights Dragon stuffed animals. The Consumer Product Safety Commission said the 33,600 products had their stuffing material exposed and were a choking hazard. The company said in a statement that it was committed to safety, and offered customers with the stuffed animal an exchange.
  6. GNC also got slammed with unsavoury news, from the Oregon attorney general. In a court filing, Ellen Rosenblum alleged that the health-and-nutrition-products retailer violated the Oregon Unlawful Trade Practices Act and sold dietary supplements that had potentially dangerous ingredients. One of them — BMPEA — is banned by the World Anti-Doping Organisation. GNC shares sank by as much as 21%. In response, the company said the claims were “without merit”.
  7. In economic data, the four-week average of initial jobless claims fell to the lowest level since 1973, at 263,250. First-time claims for unemployment insurance totaled 259,000 last week.
  8. And two for the housing sector: Existing-home sales rose more than expected, by 4.7% at an annualized rate of 5.55 million. Lawrence Yun, the National Association of Realtors’ chief economist, said affordability had slightly improved in the spring, maintaining demand. The median existing-home price rose 6.1% year-on-year to $US221,900. And, home prices rose 0.3% in August, less than expected, according to the Federal Housing Finance Agency (FHFA).
  9. The Treasury Department postponed next week’s auction of two-year notes “due to debt ceiling constraints”. It’s the first major step that government took, as a standoff continues over America’s debt limit. The five-and -seven-year auctions will go as planned.

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