The US markets closed higher on Tuesday, for fourth consecutive session as investors took stock of disappointing June retail sales numbers and how the data factor into the Federal Reserve’s plans for a rate hike. On the economy front, Americans purchased fewer goods and services at retail stores in June, showing little appetite to boost spending despite a gradually improving US economy. Retail sales fell a seasonally adjusted 0.3% in June to mark the first decline in fourth months. Sales for May and April were also a bit smaller than initially estimated. The disappointing June sales report as well as the downward revisions in the prior two months suggests US growth in the second quarter might be somewhat softer. Small-business sentiment dropped sharply in June, mostly on concerns over earning trends. The National Federation of Independent Business small-business optimism index fell 4.2 points to 94.1. The weakness was substantial across the board, showing no signs of a growth spurt in the near future.
Meanwhile, inventories at US businesses rose 0.3% in May. Business sales were up 0.4% in May, slower than April’s growth of 0.5%. The inventory-to-sales ratio, an indication of demand, was unchanged at 1.36. The prices the US paid for imported goods fell 0.1% in June, marking the 11th decline in the past 12 months. Excluding fuel, import prices declined by 0.2%. The price of US-made goods exported to other nations also fell 0.2% in June. In the past 12 months import prices have dropped 10%, mostly because of a lower oil costs. Import prices are down a smaller 2.3% excluding fuel in the same span. Lower import prices have helped keep a tight lid on US inflation, but that also reflects a tepid global economy.
The Dow Jones Industrial Average added 75.90 points or 0.42 percent to 18,053.58, the Nasdaq was up 33.38 points or 0.66 percent to 5,104.89 and the S&P 500 gained 9.35 points or 0.45 percent to 2,108.95.
The Indian ADRs markets ended mixed on Tuesday, Dr. Reddy’s Lab was up 0.45%, Wipro was up 0.07% and Infosys was up 0.04%. On the other hand, Tata Motors was down by 0.92% and ICICI Bank was down 0.14%.
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