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US markets closed choppy trade with good gains

03 Feb 2015 Evaluate

The US markets closed higher on Monday, after spending much of the trading session dipping in and out of negative territory. Investors looked past a batch of government reports that suggested that the economy may be losing steam and focused instead on rising oil prices, which juiced shares in energy companies, and upbeat quarterly earnings. On the economy front, Americans cut spending in December by the largest amount since 2009, buying fewer cars and trucks and devoting less money to energy amid a deep plunge in oil prices. Yet incomes posted another solid again and falling inflation is allowing Americans to get more bang for their buck. Personal spending fell a seasonally adjusted 0.3% last month. Personal income, meanwhile, rose 0.3%.  Meanwhile, inflation as gauged by the PCE price index slipped 0.2% in December. And the core rate that excludes food and energy was unchanged. Outlays for US construction projects rose 0.4% in December to a seasonally adjusted annual rate $982.1 billion, led by public spending. The government revised November’s decrease to 0.2%. Private-construction spending rose 0.1% in December, with a 0.3% increase for residential projects and a 0.2% decline for nonresidential projects. Meanwhile, public-construction spending rose 1.1% in December.

On the other hand, two measures of manufacturing sentiment in January matched their worst performance in a year, a sign that sputtering overseas growth as well as the rapid deterioration in commodity prices is hurting US businesses. The Institute for Supply Management’s manufacturing index slowed to a reading of 53.5% from 55.1% in December. The final reading of the US manufacturing purchasing managers index was adjusted slightly upward, to a reading of 53.9 from the flash reading of 53.7. That ties December for the lowest reading in a year.

The Dow Jones Industrial Average added 196.09 points or 1.14 percent to 17,361.04, the Nasdaq Composite was up by 41.45 points or 0.89 percent at 4,676.69 while, the S&P 500 gained 25.86 points or 1.30 percent, to close at 2,020.85.

Indian ADRs closed mostly in green on Monday; Tata Motors was up by 1.44%, HDFC Bank was up by 0.74% and Infosys was up 0.27%. On the other hand, Dr. Reddy’s Lab was down 0.44% and ICICI Bank was down by 0.12%. 

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