The US markets made a mixed closing on Wednesday, after minutes from the last Federal Open Market Committee meeting showed discussion of a third round of quantitative easing. The top officials of the Federal Reserve are leaning strongly towards a third round of bond buying by the Fed, known colloquially as QE3, according to the minutes of the August 1 meeting of the Federal Open Market Committee. The economic data have stabilized since August 1, but it’s not at all clear that the improvement in the economic data has been substantial enough to forestall further action by the Fed. While the language in the minutes certainly doesn’t commit the Fed to QE3, the minutes do show that the Fed is predisposed to act at the September 12-13 meeting. In the jargon of the FOMC, the term many members usually indicates a majority of the 12-member committee that runs US monetary policy. Chairman Ben S. Bernanke will have an opportunity to clarify his views in an August 31 speech at a forum for central bankers in Jackson Hole, Wyoming, where he signaled a second round of bond buying by the Fed in 2010. Fed officials next meet on September 12-13.
In economic reports, data from the National Association of Realtors stated that sales of existing homes rose 2.3% in July, in line with expectations and illustrating an increase in activity in the housing market. Sales of existing homes in the US rose 2.3% in July, as low mortgage rates, rising rent and some job creation led to a modest rebound. The National Association of Realtors stated that sales increased to a seasonally adjusted annual rate of 4.47 million from 4.37 million in June. Compared to July 2011, sales climbed 10.4%, the 13th straight year-on-year gain. Year-to-date, sales were up 8.6%, demonstrating the improvement that has taken place in a market recovering from the burst of the housing bubble.
In Europe, Greek Prime Minister Antonis Samaras reiterated that the country is willing to implement the austerity measures laid out by the troika but the country needs some more time. He stressed that the country was not looking for additional bailout money. Separately, German Chancellor Angela Merkel and French President Francois Hollande will meet to talk about the euro-area debt crisis, with both planning to meet later in the week with Greece’s prime minister. In economic news, Norwegian jobless rate remained unchanged in June. Danish retail sales fell in July.
The Dow Jones industrial average lost 30.82 points, or 0.23 percent, to 13,172.80. The S&P 500 Index gained 0.32 points or 0.02%, to 1,413.49, while the Nasdaq Composite was up by 6.41 points, or 0.21 percent, to 3,073.67.
The Indian ADRs closed mostly mixed on Wednesday, HDFC Bank was down 0.33%, Dr. Reddy’s Lab was up 0.26% and ICICI Bank was up by 0.21%. On the other hand, Tata Motors was down 0.19% and Wipro was down 0.07%.
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