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US markets jumps on good economic reports

30 Dec 2011 Evaluate

The US markets climbed higher on Thursday, lifting the S&P 500 back into positive turf for the year, as economic data signaled that US is weathering Europe’s debt crisis. The markets extended early gains as an index of pending US home sales rose more than economists forecast, while other reports showed stronger-than-projected growth in American business activity and a drop in jobless claims over the past month to a three-year low. Data from the Labor Department said US jobless claims came in at 381,000, up from 366,000 the prior week. But the four-week moving average fell to 375,000 last week, with fewer Americans filing for jobless benefits during the past month than at any time in the past three years. This is the fourth week that claims have held below 400,000, which is considered a break-even point in job creation.

Other data showed that business activity in the US expanded more than forecast in December, prompting companies to boost employment. The Institute for Supply Management-Chicago Inc.’s business barometer was 62.5. Also, the National Association of Realtors reported the number of Americans signing contracts to purchase previously owned homes climbed a far-more-than forecast 7.3% in November.

In Europe, Italy sold 7.02 billion euros, or $9 billion, of bonds, less than targeted, as borrowing costs fell in the nation’s last debt auction of 2011. Leaders in the European parliament have proposed a road map including for common euro-region bonds in a new European treaty on fiscal discipline citing amendments submitted to the treaty’s drafters. The amendments, which would not create common bonds immediately, would focus on creating conditions where Germany may support the plan.

The Dow Jones industrial average gained 135.63 points, or 1.12 percent, to 12,287.00. The Standard and Poor’s 500 closed higher by 13.38 points, or 1.07 percent, to 1,263.02, while the Nasdaq composite gained 23.76 points, or 0.92 percent, to 2,613.74.

The Indian ADRs made a mixed closing on Thursday, Tata Motors was up by 0.35%, Infosys Technologies was up 0.32% and ICICI Bank was up by 0.28%. On the flip side, HDFC Bank was down 0.05%, and Wipro was down by 0.01%.    

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