US markets closed higher on strong economic data

The US market closed higher on Friday, as investors bet that a spate of strong economic data, including the March jobs report, won’t speed up the pace of interest-rate increases by the Federal Reserve. A sharp drop in oil prices however pulled down the energy sector, capping the gains for the main benchmarks. The oil moved lower on comment from Saudi Arabian officials, that they would only freeze oil output if Iran and other major producers do so. The comments, along with reports that output from the Organization of the Petroleum Exporting Countries rose in March, pushed oil prices lower, dragging down the energy sector.

On the economy front, the US created 215,000 new jobs in March, showing an economy that’s still expanding at a moderate pace despite some rocky moments earlier in the year. The unemployment rate rose a tick to 5% from 4.9%, as more people joined the labor force. Average hourly wages climbed 0.3% to $25.43. Hourly pay rose 2.3% from March 2015 to March 2016, unchanged from the prior month. The amount of time people worked each week was flat at 34.4 hours. The labor-force participation rate rose a notch and reached 63% for the first time in two years. Employment gains for February and January, meanwhile, were essentially unchanged. The government stated that 245,000 new jobs were created in February instead of 242,000. January’s gain was trimmed to 168,000 from 172,000. Economic activity at US manufacturing companies expanded for the first time in six months in March, a key survey of executives found. The Institute for Supply Management stated that its manufacturing index rose to 51.8% last month from 49.5% in February. The manufacturing sector has been hammered since last summer by weak growth overseas, the strong dollar, and the collapse of oil prices. There are some encouraging signs that the sector is stabilizing. The March PMI reading from Markit also improved slightly to 51.5 from a 28-month low of 51.3 in February. The ISM indexes for new orders and production increased in March for the third straight month.

On the other hand, the rise in gas prices seems to have weighed on US consumers in March. The University of Michigan’s consumer sentiment survey fell to a reading of 91 from 91.7 in February, marking the fourth monthly fall in a row. The index is well above its 2011 low of 55.8 but has come off the recovery high of 98.1 in January 2015. Spending on construction declined 0.5% in February to a seasonally adjusted annual rate of $1.14 trillion. That was a decline from an upwardly-revised January, and outlays were higher than year-ago levels by 10.3% in February. Meanwhile, Cleveland Fed President Loretta Mester stated that a strengthening economy will allow for more tightening of monetary policy as the year goes on. Mester enlightened that the economy has shown considerable resiliency, and in her view, the outlook and risks around the outlook will likely support gradual reductions in the degree of accommodation this year. She pronounced the economy broadly as sound, though she acknowledged some bumps since the December meeting, during which the FOMC hiked its rate target a quarter point for the first time in more than nine years and indicated a fairly aggressive rate hiking trajectory.

The Dow Jones Industrial Average added 107.66 points or 0.61 percent to 17,792.75, Nasdaq gained 44.69 points or 0.92 percent to 4,914.54 while, S&P 500 was up by 13.04 points or 0.63 percent to 2,072.78.

The Indian ADRs closed mostly in green; Dr. Reddy’s Lab was up 0.39%, Infosys was up by 0.23% and Wipro was up 0.17%. On the other hand, Tata Motors was down by 0.33% and HDFC Bank was down 0.10%.