The US markets closed higher on Tuesday, with the Nasdaq touching a record, but the market failed to make much headway as oil futures slumped ahead of a key meeting of major crude producers. Oil prices dropped on signs that leading oil exporters were struggling to agree on a deal to cut production ahead of an OPEC meeting on Wednesday. Investors will also be watching data from retailers closely in the coming weeks for clues on how the holiday shopping season will turn out.
There were encouraging reports on the economic front. The second reading of gross domestic product showed the economy grew at the fastest pace in over two years in the third quarter as consumers and government stepped up their spending and exports surged. Gross domestic product expanded at a 3.2% annual rate in the Commerce Department’s second reading. That is the strongest pace since the second quarter of 2014. Consumer spending rose 2.8% in the quarter, stronger than the original estimate of 2.1% and the strongest rate since 2002. The consumer sector accounts for two-thirds of the economy, and that is been bolstering economic growth for several quarters. Consumer confidence soared in November to prerecession levels. The consumer-confidence index rose to 107.1, the highest since July 2007. The index had reached a 20-month high of 103.5 in September but pulled back in October to a revised 100.8. The present situation index, a measure of current conditions, increased to 130.3 from 123.
Meanwhile, the case for raising US interest rates has clearly strengthened since early November, before Americans elected Republican Donald Trump as president. Fed Governor Jerome Powell stated that while the central bank has so far been wise to be patient on policy, moving too slowly as inflation continues to rise could leave it scrambling. Powell added that incoming data show an economy that is growing at a healthy pace, with solid payroll job gains and inflation gradually moving up to 2 percent.
The Dow Jones Industrial Average added 23.7 points or 0.12 percent to 19,121.60, Nasdaq was up 11.11 points or 0.21 percent to 5,379.92, while S&P 500 gained 2.94 points or 0.13 percent to 2,204.66.
The Indian ADRs closed mostly in green; HDFC Bank was up 1.53%, Tata Motors was up by 0.44% and Dr. Reddy’s Lab was up 0.34%. On the other hand, Infosys was down 0.06% and Wipro was down 0.02%.
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