The US markets closed higher on Wednesday, for a third straight session led by outsize gains in the energy and materials sectors. A jump in oil prices lifted energy companies, with all 40 names on the S&P 500 energy sector finishing higher, while six of them posted double-digit gains. Investors also welcomed economic reports that pointed to a slow but steady improvement in consumer spending. Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.3 percent when adjusted for inflation after holding steady in October. While consumer spending is likely running below the third-quarter’s annualized brisk pace of 3.0 percent, November’s increase could prompt economists to modestly lift their fourth-quarter gross domestic product estimates. GDP growth estimates for the final three months of the year have been hovering around a 2 percent rate, the same pace of growth in the third quarter. US personal income in November rose for an eighth straight month on solid wage gains, which should support consumer spending and bolster economic growth next year. The income increased 0.3 percent last month after an unrevised 0.4 percent rise in October. New home sales rose moderately in November, a sign the rocky housing recovery may be stabilizing. Sales ran at an annual rate of 490,000, the highest since August. November’s tally was up 4.3% from a downwardly revised 470,000 rate in October, and was 9.1% higher compared with a year ago. The year-to-date average annual rate of 495,500 new home sales is about 14% higher than the same period a year ago.
On the other hand, businesses remain skittish about making big investments, orders for durable or long-lasting US-made goods such as computers and heavy machinery softened again in November. Orders for durable goods were flat last month following a 2.9% increase in October. Yet orders would have fallen a sharp 1.5% if not for an large increase in bookings from the Pentagon. Demand was robust in some industrial segments. Orders for new cars and trucks, for example, rose 1.5%. That was more than offset by a 22.2% drop in bookings for commercial jets, a category that can be extremely jumpy from month to month because of the expense involved.
The Dow Jones Industrial Average gained 185.34 points or 1.06 percent to 17,602.61, the Nasdaq was up 44.82 points or 0.90 percent to 5,045.93 and the S&P 500 added 25.32 points or 1.24 percent to 2,064.29.
The Indian ADRs closed mostly in green; Tata Motors was up by 0.23%, Dr. Reddy’s Lab was up by 0.13%, ICICI Bank was up by 0.13% and Infosys was up 0.07%. On the other hand, HDFC Bank was down 0.13%.
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