STOCKS RALLY, GOLD TUMBLES: Here's What You Need To Know

Stocks finished higher to start the week as Citigroup, the second of the major U.S. banks to report earnings, reported better than expected profit.

First, the scoreboard:

• Dow: 17,054.10, +110.3, (+0.6)
• S&P 500: 1,976.68, +9.1, (+0.5%)
• Nasdaq: 4,439.60, +24.2, (+0.6%)

And now, the top stories of the day:

1) Citigroup reported second quarter adjusted earnings per share of $1.24, better than the $1.06 that analysts were expecting. Citigroup's revenue came in at $19.38 billion, a bit lighter than expectations. About an hour before the bank announced earnings, it announced a settlement with regulators related to investigations into the bank's handling of mortgage-backed securities ahead of the financial crisis. The bank agreed to pay $7 billion to settle the claims, with $4.5 billion of that being paid in cash and $2.5 billion for consumer relief. In connection with the settlement, Citigroup took a $3.8 billion charge in the second quarter.

2) Citigroup's report wasn't all good, however. In the second quarter, fixed income trading fell 12% and equity trading fell 26% at Citigroup. As we noted repeatedly throughout the spring, volatility drying up on Wall Street was going to lead to declining trading revenues at many major banks. In late May, Citigroup said its trading revenue could plunge 25% in the second quarter, a warning that came after JPMorgan also said markets revenue could decline 20% in the quarter. Citigroup shares, however, closed up about 3% as there had been fears the bank's settlement could be even larger.

3) Ahead of two straight days of testimony on Capitol Hill, Janet Yellen was the subject of a lengthy profile in the New Yorker, where we got a picture not only of Yellen's economic influences, but also some of her broader intellectual and political tendencies. Yellen also gave a revealing quote about what she saw ahead of the financial crisis. Yellen said that she began to be concerned about a housing bubble in 2005 and 2006, but admitted that she didn't see how huge the effects of that bubble bursting could be. "I absolutely did not see it as something that could take the financial system down," Yellen told Nicholas Lemann.

4) Shares of wearable camera company GoPro fell about 5% after Barron's published a cautious article on the company's prospects. Barron's Alexander Eule wrote that the company faces the risks of many tech gadgets: being "subsumed by our phones."

5) Gold had a rough day, falling more than 2% to about $1307 an ounce, its lowest price in almost a month. Gold, as well as silver, had a rough day as equity markets rallied, bonds sold off a little bit, and "safe haven" assets like gold and silver, got punished.

6) In mergers & acquisitions news, drug giant Mylan announced a deal to acquire rival Abbott Labs' non-U.S. developed generics business in an all-stock deal worth about $50.20 per Mylan share. The deal will also allow Mylan to restructure its tax base, which should bring its tax rate to about 21% in the first year after the deal, and into the high teens thereafter. Mylan also said it expects the deal to close in the first quarter of next year an add about $0.25 to earnings per share.

7) Also in M&A, engineering design firm AECOM agreed to acquire engineering firm URS Corporation for $4 billion, or about $56.31 per URS share. The companies said the deal is expected to close in October, and will create, "an industry leader with the ability to deliver more capabilities from a broad global platform to reach more clients in more industry end markets," said Michael Burke, AECOM president and CEO. URS shares finished the day up about 12%, while AECOM stock rallied nearly 10%.

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