The US markets closed higher on Thursday, led by advances in the materials and industrials sectors. Wall Street shares tracked fluctuations in crude-oil prices throughout much of the day, pushing stocks in and out of positive territory. On the economy front, initial jobless claims rose in the last week of January but remained at a very low level, suggesting the labor market is still sound despite a rocky start to 2016 for the US economy. New claims rose by 8,000 a seasonally adjusted 285,000 in the seven days stretching from January 24 to January 30. The four-week average of initial claims increased by 2,000 and stood at 284,750. The monthly number is viewed as a more reliable indicator of labor-market trends. Any number below 300,000 is historically considered a sign of a robust labor market, but claims are no longer falling rapidly, as they did from 2010 to 2015.
On the other hand, the productivity of US businesses fell at a 3% annual pace in the fourth quarter, marking the biggest decline in almost two years. Weak productivity growth has been a hallmark of the near-seven-year economic recovery. Productivity increased just 0.6% in 2015, less than one-third the average since the end of World War II. Rising productivity is the key to a better standard of living. Historically the US has grown at a 3%-plus rate, but the current expansion has been limited to 2% annual pace. Orders for goods manufactured in US factories slid 2.9% in December. Orders have fallen in four of the last five months as the manufacturing sector struggles with a stronger dollar and the energy slowdown.
Meanwhile, a top Federal Reserve official stated that he backs tougher stress tests for too big to fail banks including higher capital requirements that would make them even more binding. Boston Fed President Eric Rosengren, among the US central bank’s more influential regulators, added that those changes have significantly reduced the likelihood that so-called systemically important financial firms would fail. The United States adopted both stress tests and capital surcharges for banks in the wake of the 2007-2009 financial crisis when US investment bank Lehman Brothers collapsed and set off a deep global recession.
The Dow Jones Industrial Average added 79.92 points or 0.49 percent to 16,416.58, the Nasdaq was up 5.32 points or 0.12 percent to 4,509.56 while the S&P 500 gained by 2.92 points or 0.15 percent to 1,915.45.
The Indian ADRs closed in green; HDFC Bank was up 0.69%, Tata Motors was up 0.47%, Dr. Reddy’s Lab was up 0.19%, Infosys was up by 0.19% and Wipro was up by 0.15%.
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