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US markets slips on European worry

09 May 2012 Evaluate

The US markets closed in red on Tuesday, as concern that new Greek political leaders will back out of bailout agreements sent the US benchmark equity index down. However, the indices recouped most of losses limiting the damage that came with concern about instability of Greece as a key members of Congress presented distinctly different measures to fundamentally reform the Federal Reserve, a sign that the central bank remains very much under the microscope in the wake of the extraordinary policy steps it took during and after the financial crisis. Rep. Kevin Brady, an eight-term Republican from Texas stated that at the moment, the Fed must follow two objectives set by Congress. The central bank is mandated to insure that prices remain stable while also trying to maintain conditions for low unemployment.

In Europe, speculation that Greece’s new government will reject terms of its financial rescue grew as New Democracy leader Antonis Samaras stated that he failed to form a coalition following the weekend elections, passing the opportunity to Alexis Tsipras’s Syriza party. Tsipras stated he plans to form a government of left-wing parties that would nationalize banks, repeal recent labor reforms and cancel the bailout accords.

The Dow Jones Industrial Average closed lower by 76.44 points, or 0.59 percent, at 12,932.10. The S&P 500 lost 5.86 points, or 0.43 percent, at 1,363.72, while the Nasdaq was down by 11.49 points, or 0.39 percent, at 2,946.27.

Indian ADRs closed mixed on Tuesday; HDFC Bank was down 1.04%, ICICI Bank was down 0.94%, Tata Motors was down 0.88% and Tata Communication was down 0.46%. On the flip side, Infosys Technologies was up 0.17%.

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