diff --git a/lua/diffs/highlight.lua b/lua/diffs/highlight.lua
index 1045d81..ed9329b 100644
--- a/lua/diffs/highlight.lua
+++ b/lua/diffs/highlight.lua
@@ -637,17 +637,10 @@ function M.highlight_hunk(bufnr, ns, hunk, opts)
 
       if opts.highlights.background and is_diff_line then
         pcall(vim.api.nvim_buf_set_extmark, bufnr, ns, buf_line, 0, {
-          end_row = buf_line + 1,
-          hl_group = line_hl,
-          hl_eol = true,
+          line_hl_group = line_hl,
+          number_hl_group = opts.highlights.gutter and number_hl or nil,
           priority = p.line_bg,
         })
-        if opts.highlights.gutter then
-          pcall(vim.api.nvim_buf_set_extmark, bufnr, ns, buf_line, 0, {
-            number_hl_group = number_hl,
-            priority = p.line_bg,
-          })
-        end
       end
 
       if is_marker and line_len > pw then
diff --git a/lua/diffs/init.lua b/lua/diffs/init.lua
index 81d4f97..6975af1 100644
--- a/lua/diffs/init.lua
+++ b/lua/diffs/init.lua
@@ -347,9 +347,6 @@ end
 ---@param path string
 ---@return string[]?
 local function read_file_lines(path)
-  if vim.fn.isdirectory(path) == 1 then
-    return nil
-  end
   local f = io.open(path, 'r')
   if not f then
     return nil
@@ -543,10 +540,11 @@ local function compute_highlight_groups(is_default)
   local normal_fg = normal.fg or (dark and 0xcccccc or 0x333333)
 
   local alpha = config.highlights.blend_alpha or 0.6
+  local text_alpha = math.min(alpha + 0.3, 1.0)
   local blended_add = blend_color(add_bg, bg, alpha)
   local blended_del = blend_color(del_bg, bg, alpha)
-  local blended_add_text = add_bg
-  local blended_del_text = del_bg
+  local blended_add_text = blend_color(add_bg, bg, text_alpha)
+  local blended_del_text = blend_color(del_bg, bg, text_alpha)
 
   local clear_hl = { default = dflt, fg = normal_fg }
   if not transparent then
diff --git a/spec/context_spec.lua b/spec/context_spec.lua
index 84243f4..237b7f3 100644
--- a/spec/context_spec.lua
+++ b/spec/context_spec.lua
@@ -165,39 +165,6 @@ describe('context', function()
       assert.is_nil(hunks[1].context_after)
     end)
 
-    it('skips when path is a directory', function()
-      vim.fn.mkdir(vim.fs.joinpath(tmpdir, 'subdir'), 'p')
-
-      local hunks = {
-        make_hunk('subdir', {
-          file_new_start = 1,
-          file_new_count = 1,
-          lines = { '+x' },
-        }),
-      }
-      compute_hunk_context(hunks, 25)
-
-      assert.is_nil(hunks[1].context_before)
-      assert.is_nil(hunks[1].context_after)
-    end)
-
-    it('skips when path is a symlink to a directory', function()
-      vim.fn.mkdir(vim.fs.joinpath(tmpdir, 'real_dir'), 'p')
-      vim.uv.fs_symlink(vim.fs.joinpath(tmpdir, 'real_dir'), vim.fs.joinpath(tmpdir, 'link_dir'))
-
-      local hunks = {
-        make_hunk('link_dir', {
-          file_new_start = 1,
-          file_new_count = 1,
-          lines = { '+x' },
-        }),
-      }
-      compute_hunk_context(hunks, 25)
-
-      assert.is_nil(hunks[1].context_before)
-      assert.is_nil(hunks[1].context_after)
-    end)
-
     it('skips when file does not exist on disk', function()
       local hunks = {
         make_hunk('nonexistent.lua', {