The US markets closed lower on Tuesday, with disappointing retailers earnings weighing on investor sentiment. The selling intensified in the afternoon after comments from Philadelphia Fed President Charles Plosser, who stated that Fed may need to act sooner rather than later should the economy accelerate. The way Charles Plosser sees it, the Federal Reserve is sitting on a ticking time bomb that could severely damage the economy unless the central bank reacts quickly to defuse the looming threat. Plosser added that the US economy is likely to grow at an accelerating pace in the second half of 2014 and into next year, possibly requiring the Federal Reserve to begin raising interest rates sooner rather than later. Plosser reaffirmed his view that the economy will continue to strengthen over the next year. He enlightened a more rapid pace of hiring might lower the unemployment rate, now at 6.3%, below 6% by the end of 2014. William Dudley, the president of the New York Fed, stated that the Federal Reserve will take its time lifting interest rates. He expects the level of rates over the longer-term to be well below the historical average of 4.25%.
The Dow Jones Industrial Average was down by 137.55 points or 0.83 percent, to 16,374.31, the Nasdaq Composite lost 28.92 points or 0.70 percent, to 4,096.89 and the S&P 500 dropped 12.25 points or 0.65 percent, to close at 1,872.83.
The Indian ADRs closed on mixed note on Tuesday; ICICI Bank was down by 0.44%, HDFC Bank was down 0.42% and Tata Motors was down 0.16%. On the other hand, Infosys was up 0.73% and Dr. Reddy’s Lab was up 0.06%.