The US market lost much of yesterday’s gains on Thursday, after Federal Reserve Chairman Ben Bernanke stated that the central bank would review the economy before making any decision on further stimulus. Bernanke stated that central bank will need to assess conditions before deciding if more measures are needed to stoke an economy threatened by Europe’s debt crisis and US budget cuts. Though, in a testimony prepared for delivery to the Joint Economic Committee of Congress situation he admitted that Europe poses significant risks to the US financial system and economy and must be monitored closely. The move fed into expectations that central bankers around the globe would move to boost growth. Besides, the Federal Reserve voted unanimously to release a tough proposal to implement a global agreement on bank capital buffers known as Basel III, a critical step to ensure large institutions are sufficiently cushioned against future financial shocks.
However, on the data front, the count of first-time applicants filing for jobless benefits declined last week, with claims down to 377,000 from a revised 389,000 the week before. The number of initial applicants filing for unemployment benefits declined last week, the government reported, but jobless claims remained at a level consistent with mediocre hiring trends. First-time claims fell by 12,000 to a seasonally adjusted 377,000 in the week ended June 2. Claims from two weeks ago were revised up to 389,000 from an original reading of 383,000, based on more complete data collected at the state level.
In Europe, Fitch Ratings cut Spain's long-term credit rating to BBB and left it two notches from junk, citing the cost of recapitalizing the country's banking industry and a lengthening recession.
The Dow Jones Industrial Average gained 46.17 points, or 0.37 percent, to close at 12,461.00. The S&P 500 lost 0.14 points, or 0.01 percent, to finish at 1,314.99, while the Nasdaq was down by 13.70 points, or 0.48 percent, to settle at 2,831.02.
The Indian ADRs closed mixed; HDFC Bank was up 0.99%, Dr. Reddy’s Lad was up 0.17% and ICICI Bank was up by 0.04%. On the flip side, Infosys Technologies was down 1.07% and Tata Communications was down by 0.27%.
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