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US market ends flat on better than expected corporate results

21 Apr 2012 Evaluate

The US markets made a mixed closing on Friday, with two of the major indices halting a two-week losing streak, as better-than-expected corporate results overrode global concerns. The market sentiment was cautiously positive after Microsoft, General Electric and McDonald’s either met or exceeded expectations. Microsoft reported better than expected earnings while General Electric reported decline in quarterly sales but decline was ahead of estimates. On the other hand, McDonald’s stated its quarterly profit increased and earnings per share rose on same store sales in the US on new menu items and higher margin coffee frappes and fruit smoothies.

Meanwhile, the finance ministers and central bankers from the leading 20 economies gathered in Washington D.C. to discuss the global economies and tackle the rising tensions in the euro zone sovereign debt markets. International Monetary Fund ahead of the meeting stated that it secured additional funds of $320 billion to bolster its lending capacity to the euro zone. The IMF move to bolster its capital to facilitate the lending to euro zone is in stark contrast to its posture at the time of Asian crisis when Indonesia, Thailand and Malaysia came under heavy pressure after a run on their currencies. Besides, Europe’s governments were told that the onus for fixing their debt woes lies with them as the Group of 20 warned the two-year crisis still threatens global growth. With finance chiefs from the G-20 meeting in Washington, those from Canada and Australia joined the IMF and US in pressing Europe to intensify efforts to quell the turmoil as it spreads to Spain. The G-20 cited the situation in Europe first in a list of drags on the world economy. However, Germany’s Ifo institute stated its business climate index rose to 109.9, a nine- month high, adding to evidence Europe’s largest economy can weather the debt crisis.

The Dow Jones Industrial Average closed higher by 65.16 points, or 0.50 percent, at 13,029.30. The S&P 500 gained 1.61 points, or 0.12 percent, at 1,378.53, while the Nasdaq was down by 7.11 points, or 0.24 percent, at 3,000.45.

Indian ADRs closed mixed on Friday; ICICI Bank was down 0.63%, Infosys Technologies was down 0.48% and Dr. Reddy’s Lab was down 0.37%. On the flip side, HDFC Bank was up 0.59% and Wipro was up 0.15%.

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