The US markets edged higher on Tuesday, on signs of stabilization in housing market, but investors remained cautious ahead of a summit of European leaders. US home prices shot up in April to post the first monthly gain since last autumn, according to a closely followed S&P/Case-Shiller index released. The S&P/Case-Shiller 20-city composite index gained 1.3%, with 19 out of 20 cities registering gains, to take the year-on-year drop from 2.6% to 1.9%. However, US consumer confidence has declined for a fourth month, with gloomier views in June on future business conditions and income. The consumer-confidence index fell to 62 in June - the lowest level since January - from a revised 64.4 in May. A prior estimate for May had pegged the level at 64.9. Generally, when the economy is growing at a good clip, confidence readings are at least 90.
In Europe, investors remained wary ahead of a gathering of European leaders later in the week, with Germany offering a tepid response to a road map released by European Union officials outlining a plan to tighter fiscal integration. Markets were briefly rattled on reports that German Chancellor Angela Merkel was quoted as telling at a meeting of one of the parties in her coalition that she does not think Europe will have shared total debt liability in her lifetime. Merkel on Monday had played down large moves such as the issuance of common debt until euro-area countries agree to broad oversight of their budgets. Besides, Spanish and Italian bonds declined as those nations’ borrowing costs rose at debt auctions. Separately, Egan-Jones cut Germany’s sovereign rating to A+ from AA-.
The Dow Jones Industrial Average closed higher by 32.01 points or 0.26%, at 12,534.70. The S&P 500 finished the day up by 6.27, or 0.48%, to 1,319.99 while the Nasdaq closed up by 17.90 points or 0.63%, to 2,854.06.
The Indian ADRs closed in green; ICICI Bank was up 0.48%, Dr. Reddy’s Lab was up 0.44%, HDFC Bank was up 0.27%, Infosys was up by 0.09% and Tata Motors was up 0.08%.