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US markets jump on improving consumer confidence

18 Aug 2012 Evaluate

The US markets edged higher on Friday, giving the Standard & Poor’s 500 Index its longest rally since January 2011 with the broader market capping off a sixth straight week of gains after economic data showed a rise in consumer sentiment in August. A gauge of consumer sentiment rose in early August on rosier views of current economic conditions, but remained relatively low, according to data released by the University of Michigan-Thomson Reuters. For a preliminary August reading, the UMich sentiment index increased to 73.6, the highest level since May from a final July reading of 72.3, while economists polled expected the index to decline to 71.8. However, the Conference Board stated that its leading economic index grew 0.4% in July. Though the climb in the index was stronger than the 0.3% forecast, it comes after downward revisions to June and May figures. The Conference Board stated that the index fell 0.4% in June and rose 0.3% in May, with both months a tenth of a percentage point worse than previously reported.

In Europe, investor concerns over the region’s debt crisis receded after German Chancellor Angela Merkel stated that ECB’s insistence on conditionality in return for help to lower borrowing costs in indebted countries matches her country’s priorities to end the crisis in the euro region. Also, Spain is about to get an emergency disbursement from a 100 billion-euro ($123 billion) bailout package. In economic news, euro zone current account and trade surplus rose but French leading index declined in June. The seasonally adjusted current account surplus for the euro zone rose to €12.7 billion in June from €10.3 billion in May, according to data published by the European Central Bank. Separately, the leading economic index of the French economy dropped 0.3% sequentially to 113 in June, after falling 0.2% each in the previous two months. The coincident economic index, which measures the current situation, remained unchanged at 104.5 in June.

The Dow Jones industrial average gained 25.09 points, or 0.19 percent, to 13,275.20. The S&P 500 Index gained 2.65 points, or 0.19 percent, to 1,418.16, while the Nasdaq Composite was up by 14.20 points, or 0.46 percent, to 3,076.59.

The Indian ADRs closed mixed on Friday, ICICI Bank was up 0.60%, Infosys was up 0.50% and Tata Motors was up 0.49%. On the other hand, Dr. Reddy’s Lab was down 0.15% and Tata Communications was down 0.12%.

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