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US market closed mostly up on mixed batch of economic data

16 Aug 2012 Evaluate

The US markets closed mostly in green on Wednesday, as investors weighed a mixed batch of economic data. The US consumer prices were unchanged in July, as lower energy prices offset gains in the cost of food and other items. An index of energy prices declined 0.3% in July, while the food index rose 0.1%. The so-called core consumer price index, which excludes the volatile categories of food and energy, rose 0.1%. The Federal Reserve watches consumer prices, and is expecting inflation to be relatively low through 2013. Besides, the New York Federal Reserve Bank reported that an index of manufacturing dropped sharply in August, its first contraction in nine months. The Empire State manufacturing index dropped sharply to negative 5.9 in August. The decrease was larger than expected. Moreover, the better tone of the economic data in the two weeks since the Federal Reserve’s last policy meeting have caused some Fed watchers to doubt that the central bank will launch another massive bond purchase program next month. Indeed, the data for July has shown some improvement relative to dismal June readings. For instance, the retail sales report for July released surprised to the upside. The July unemployment report was stronger than the past few months. The trade deficit also narrowed sharply in June.

In Europe, the Bank of England policymakers were unanimous in retaining quantitative easing program at £375 billion and the interest rate unchanged at 0.50%, according to the minutes of the meeting held on August 1 and 2. Also, the number of people claiming jobless benefits in the UK declined in July. The claimant count declined by 5,900 persons monthly to 1.59 million in July. The seasonally adjusted claimant count rate for the UK was 4.9% in July, unchanged from June.

The Dow Jones industrial average lost 7.36 points, or 0.06 percent, to 13,164.80. The S&P 500 Index gained 1.60 points, or 0.11 percent, to 1,405.53, while the Nasdaq Composite was up by 13.95 points, or 0.46 percent, to 3,030.93.

The Indian ADRs closed mostly mixed on Wednesday, HDFC Bank was down 0.23%, Tata Motors was down 0.19% and ICICI Bank was down 0.17%. On the other hand, Infosys was up 0.23% and Sterlite Industries was up 0.04%.

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