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US markets surge on strong jobs report

05 Dec 2015 Evaluate

The US markets surged on Friday, with the S&P 500 and Dow Industrials posting their biggest one-day gains in nearly three months. Investors took a strong US jobs report as a further indication that the Federal Reserve is more than likely to raise interest rates later this month. The economy produced another sturdy gain in new jobs in November, all but guaranteeing the Federal Reserve will raise US interest rates later this month in response to a tightening labor market. Companies and government agencies added 211,000 jobs last month while the pace of hiring in October and September was stronger than previously reported. The unemployment rate held steady at 5% despite more hiring, kept in place by a sizable increase in the number of people who joined the labor force in search of work. That’s a sign people think more jobs are available. In a mild disappointment, wage growth for US workers moderated after a strong gain in October. The increase in hourly pay over the past 12 months totaled 2.3%, down from 2.5% in the prior month. The amount of time people worked each week fell a notch.

On the other hand, the US trade deficit climbed 3.4% in October as exports of American-supplied goods and services fell to the lowest level in three years. The trade gap rose to a seasonally adjusted $43.9 billion from an upwardly revised $42.5 billion in September. The gloomier trade picture, the result of a strong dollar and weak global growth, is likely to weigh on the US economy again in the fourth quarter. A higher deficit subtracts from gross domestic product. Exports dropped 1.4% to $184.1 billion, hitting the lowest level since October 2012. US imports also dipped, down 0.6%, though most of the decline stemmed from the cheaper oil. The value of US oil imports was the lowest since 2003.

The Dow Jones Industrial Average added 369.96 points or 2.12 percent to 17,847.63, the Nasdaq gained 104.74 points or 2.08 percent to 5,142.27 and the S&P 500 jumped 42.07 points or 2.05 percent to 2,091.69.

The Indian ADRs closed in green; HDFC Bank was up by 0.88%, Infosys was up 0.24%, Dr. Reddy’s Lab was up by 0.21%, Tata Motors was up 0.21% and Wipro was up by 0.04%.

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