Stocks rose on Thursday as encouraging results from Morgan Stanley lifted optimism over the battered financial sector, while investors were cheered by the initial details over a rescue plan for Greece.
The Nasdaq was slightly lower as a pair of disappointing results from Intel and F5 Networks pressured the index.
Europe is willing to let Greece default on its sovereign debt under a crisis response involving a bond buyback, a debt swap but no new taxes on banks, sources said, as an emergency summit began. The euro zone crisis has been a big headwind for U.S. equities in recent weeks.
The plan is just about kicking the can down the road, it doesn't make the issue go away, said Tom Wirth, senior investment officer for Chemung Canal Trust Co, which manages $1.5 billion in Elmira, New York. However, it puts the issue on the back burner, which is good for equities in the short term.
The Dow Jones industrial average <.DJI> jumped 60.47 points, or 0.48 percent, at 12,632.38. The Standard & Poor's 500 Index <.SPX> was up 7.62 points, or 0.57 percent, at 1,333.46. The Nasdaq Composite Index <.IXIC> put on 2.29 points, or 0.08 percent, at 2,816.52.
Morgan Stanley gained 5.8 percent to $22.98 after its second-quarter loss came in narrower than expected.
On the downside, Dow component Intel Corp
F5 Networks Inc
Results from American Express Co
Chinese manufacturing contracted for the first time in a year in July, data showed Thursday, as the government's monetary tightening policy and sluggish global demand weighed on the economy.
In the latest economic data, new U.S. claims for unemployment benefits rose more than expected last week, the government said. Equities were little affected by the data.
(Editing by Jeffrey Benkoe)