The US market closed higher on Monday, on bets that the Federal Reserve will move more slowly in raising interest rates given Friday’s disappointing jobs report. On the economy front, companies in the US service sector such as health care and retail grew at a slightly slower but still solid pace in March. The Institute for Supply Management stated that its nonmanufacturing index fell to 56.5% from 56.9% in February. Still, readings over 50% signal more businesses are expanding instead of contracting. The survey is compiled from a questionnaire of the executives who buy supplies for their companies and it tends to rise in fall in tandem with the broader economy. The new orders index rose 1.1 points to 57.8% while employment edged up 0.2 points to 56.6%, the highest level since last July. However, the Federal Reserve’s Labor Market Conditions Index, a compilation of 19 labor market measures, fell to negative 0.3 in March from a revised positive 2.0 in February.
Meanwhile, New York Federal Reserve President William Dudley stated that the economy should speed up soon after a first-quarter slowdown that he blames partly on bad weather. But he also offered caveats that leave plenty of room for doubt and suggested that Fed won’t raise interest rates at least until September. Dudley expects US growth to slow to 1% in the first quarter from 2.2% in the final three months of 2014. He pointed to a string of soft economic reports, including a mediocre 126,000 increase in US jobs in March that was only half as large as expected. Dudley attributed the recent slowdown mainly to three factors: harsh weather, a stronger dollar and the negative effects of cheap oil on the vibrant US energy industry.
The Dow Jones Industrial Average added 117.61 points or 0.66 percent to 17,880.85, Nasdaq was up by 30.38 points or 0.62 percent to 4,917.32 while, S&P 500 was higher by 13.66 points or 0.66 percent to 2,080.62.
The Indian ADRs closed mostly in red on Monday; HDFC Bank was down 0.14%, Infosys was down 0.09% and ICICI Bank was down by 0.08%. On the other hand, Dr. Reddy’s Lab was up 1.84% and Tata Motors was up 0.76%.