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US markets closed mostly lower; Dow snaps 7-session winning streak

17 Nov 2016 Evaluate

The US markets closed mostly lower on Wednesday, with the Dow Jones Industrial Average snapping its seven-session winning streak, as well as a string of four consecutive record close, as a postelection rally by financial stocks paused. Oil futures settled down after swinging between gains and losses. A rise in US crude supply outweighed reports that Russia’s energy minister, Alexander Novak, stated that he sees a strong chance the Organization of the Petroleum Exporting Countries will reach an agreement to curb production. On the economy front, industrial production was unchanged in October after a big drop in output as warmer-than-normal temperatures reduced the demand for heating. The Federal Reserve sated that production was unchanged - economists had forecast a 0.2% gain - as utilities output cratered by 2.6%. Manufacturing output edged up 0.2%, while mining output stormed 2.1% higher, its best performance since March 2014. Coal-mining gains offset declines in the extraction of crude oil and natural gas. Coal mining output has recovered 46% since May. There were various upward and downward revisions to past months, though the total level of industrial output ended up in the same place. Capacity utilization slipped to 75.3% from 75.4%.

Moreover, an index of home builder sentiment was unchanged in November. The National Association of Home Builders’ index was steady at 63. Two of the index’s three sub-gauges, measuring current sales conditions and sales expectations over the coming six months, were at 69 in November. The index of buyer traffic rose one point to 47. It hasn’t topped 50 since the height of the housing bubble a decade ago. Inflation at the US wholesale level remains low, but it’s no longer falling. The producer price index was unchanged in October, confounding Wall Street’s expectation for an increase. Wholesale costs have risen 0.8% in the 12 months stretching from October 2015 to October 2016. That’s the strongest one-year change since the end of 2014.

Meanwhile, Federal Reserve Bank of St. Louis President James Bullard stated that there’s a chance the US economy could get a medium-term boost if President-elect Donald Trump boosts infrastructure spending and reforms taxes. While Bullard offered that possibility, he said it’s still too soon to say how the economy may be affected by the election and he hasn’t changed his near-term outlook for growth or monetary policy. Bullard added that a single policy-rate increase, possibly in December, may be sufficient to move monetary policy to a neutral setting.

The Dow Jones Industrial Average lost 54.92 points or 0.29 percent to 18,868.14, S&P 500 edged lower 3.45 points or 0.16 percent to 2,176.94, while Nasdaq was up 18.96 points or 0.36 percent to 5,294.58.

The Indian ADRs closed mostly in red, Dr Reddy’s was down 2.40%, HDFC Bank was down by 1.61% and Tata Motors was down by 0.56%. On the other hand, Infosys was up 0.11% and Wipro was up 0.08%.



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