US markets closed up; S&P, Dow at record highs

19 Sep 2014 Evaluate

The US markets closed higher on Thursday, with the S&P 500 and Dow Jones Industrial Average closing at record levels, as investors welcomed the Federal Reserve’s commitment to keep low interest rates long after the ending of monetary stimulus. The Senate passed a bill on funding federal government operations until December 11. The measure was approved in the House of Representatives and now goes to President Barack Obama for signature. The bill will prevent a government shutdown after the fiscal year ends on September 30. On the economy front, the number of people who applied for jobless benefits dropped 36,000 to 280,000 in the week that ended September 13, hitting the lowest level since mid-July, signaling that employers are laying off very few workers. The US Labor Department tweaked initial claims for the week that ended September 6 to 316,000. The four-week average of new claims, a trend that’s less volatile than weekly changes, fell 4,750 to 299,500. Besides, continuing claims, which show the number of people already receiving benefits, dropped 63,000 to 2.43 million in the week that ended September 6, hitting the lowest tally since May 2007. The four-week average for continuing claims fell 18,250 to 2.48 million.

Moreover, the economy created 7,000 more jobs than initially reported in the one-year period from April 2013 to March 2014. Previously some 2.28 million jobs were estimated to have been created during that period. The preliminary data was released as part of the department’s regular benchmark revision of employment data based on actual tax returns. The revisions will be incorporated into the employment data in February 2015. Consumer credit is strengthening, according to Federal Reserve data released. Household debt grew 3.6% in the second quarter, driven by an 8.1% gain in consumer credit like car and student loans. That’s the largest rise since the fourth quarter of 2001. Mortgage debt rose a slim 0.4% after two straight quarterly declines. The data was part of a voluminous report called the financial accounts of the United States, which contains details on an array of assets and liabilities.

On the other hand, manufacturing activity in the Philadelphia-region expanded at the slowest rate in three months in September, dampening optimism over the US economic outlook. The Federal Reserve Bank of Philadelphia stated that its manufacturing index deteriorated to a reading of 22.5 this month from August’s reading of 28.0. The manufacturers in the Philadelphia region however continued to do brisk business in September as hiring intentions rose to a 31-year high, a strong signal that companies expect growth to improve over the rest of the year. Construction started on new US homes tumbled 14.4% in August, pulling back after a surge in July, signaling some shakiness in the housing market’s recovery. Led by drops throughout the country, the annual rate of housing starts fell to 956,000 last month from 1.12 million in July, which was the fastest pace since late 2007.

Dow Jones Industrial Average added 109.14 points or 0.64 percent to 17,265.99, the Nasdaq was up by 31.24 points or 0.68 percent to 4,593.43, and S&P 500 ended higher by 9.79 points or 0.49 percent to 2,011.36.

The Indian ADRs closed in green on Thursday; ICICI Bank was up by 1.79%, Dr. Reddy’s Lab was up 1.65%, HDFC Bank was up by 0.72%, Tata Motors was up by 0.62% and Infosys was up 0.24%.

US markets closed up; S&P, Dow at record highs

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