Benchmarks ended in the green on Thursday after the Greek government approved austerity measures to secure a bailout package from its creditors. Meanwhile, Netflix's upbeat quarterly results boosted the technology sector, which eventually had a positive impact on the Nasdaq. The tech-laden index closed at a record level since Jun 23.
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The Dow Jones Industrial Average (DJI) gained 0.4% to close at 18,120.25. The Standard & Poor's 500 (S&P 500) advanced 0.8% to 2,124.29. The tech-laden Nasdaq Composite Index closed at 5,163.18; increasing 1.3%. The fear-gauge CBOE Volatility Index (VIX) declined 8.5% to settle at 12.11. A total of about 5.6 billion shares were traded on Thursday, lower than this month's average of 6.6 billion. Advancers outpaced declining stocks on the NYSE. For 68% stocks that advanced, 30% declined.
Greek government's vote in favor of austerity measures alleviated concerns about the country's exit from the currency bloc. Approval for tougher policy overhauls and pension reforms came in despite violent protests by anti-austerity demonstrators ahead of the Greek parliamentary vote.
Eurozone finance ministers said: "We reached today a decision to grant in principle a 3-year ESM stability support to Greece, subject to the completion of relevant national procedures." Additionally, the European Central Bank (ECB) President Mario Draghi said that the central bank will give more aid to Greece. Draghi was confident that the cash-strapped country will be able to make a debt payment of 4.2 billion euros to the ECB on Jul 20.
The Nasdaq closed at a record high on Thursday helped by gains in technology stocks. Upbeat earnings results by Netflix, Inc. ( NFLX ) boosted the technology sector. Shares of Netflix soared 18% after the company reported second quarter earnings per share of 6 cents, beating the Zacks Consensus Estimate of 5 cents. However, revenues of $1.64 billion were marginally short of the Zacks Consensus Estimate of $1.65 billion.
The Technology Select Sector SPDR (XLK) gained 1.3%, the second highest among the S&P 500 sectors. Key holdings from the sector including Apple Inc. ( AAPL ), Microsoft Corporation ( MSFT ), AT&T Inc. ( T ), Google Inc ( GOOGL ) and International Business Machines Corporation ( IBM ) increased 1.3%, 1.9%, 1.2%, 3.1% and 1.5%, respectively.
Financial sector was lifted by Citigroup Inc.'s ( C ) better-than-expected quarterly results. Citigroup posted second quarter earnings per share of $1.45 that outpaced the Zacks Consensus Estimate of $1.35. Revenues of $19.47 billion also beat the Zacks Consensus Estimate of $19.16 billion. Shares of Citigroup gained 3.8%.
Another financial behemoth, The Goldman Sachs Group, Inc. ( GS ) reported second quarter earnings per share of $4.75 that came in ahead of the Zacks Consensus Estimate of $3.70. Revenues of $9.1 billion also outpaced the Zacks Consensus Estimate of $8.8 billion. However, shares of Goldman Sachs declined 0.8%. Nevertheless, the Financial Select Sector SPDR (XLF) increased almost 1%.
Thursday's earnings were broad based, with 9 out of 10 sectors ending in the green. The Utilities Select Sector SPDR (XLU) gained 1.5%, the highest gainer among the S&P 500 sectors. Key utilities stocks including NextEra Energy Inc ( NEE ), Exelon Corporation ( EXC ), Southern Company ( SO ), PG&E Corporation ( PCG ) and Duke Energy Corporation ( DUK ) increased 1.6%, 2.3%, 1.4%, 1.7% and 1.1%, respectively.
Coming back to other earnings results, UnitedHealth Group Incorporated ( UNH ) reported second quarter earnings of $1.64 per share, beating the Zacks Consensus Estimate of $1.57. Revenues of $36.3 billion also beat the Zacks Consensus Estimate of $35.7 billion. Philip Morris International, Inc. ( PM ) posted second quarter earnings per share of $1.21 that beat the Zacks Consensus Estimate by 8%. Revenues of $6.9 billion also beat the Zacks Consensus Estimate of $6.7 billion. Intel Corporation ( INTC ) reported first quarter earnings per share of 55 cents, which were ahead of the Zacks Consensus Estimate of 50 cents. Revenues of $13.20 billion also topped the Zacks Consensus of $13.04 billion. While shares of Intel and Philip Morris gained 0.7% and 3.2%, respectively, shares of UnitedHealth Group dropped 0.7%.
Meanwhile, the Federal Reserve Chairwoman Janet Yellen concluded her two-day testimony to the Senate Banking Committee by saying that she doesn't want the inflation rate to linger below the target rate of 2%. She had said on Wednesday that the U.S. economy will strengthen and expects the central bank to hike interest rates "at some point this year".
In economic news, the U.S. Department of Labor reported that initial claims decreased by 15,000 for the week ending Jul 11 to 281,000, more than the consensus estimate of unemployment benefits declining to 286,000. Separately, the Philadelphia Federal Reserve's manufacturing index fell to 5.7 in July from a 15.2 in June.