The US markets jumped on Thursday, lifting the S&P 500 to its highest finish since 2007, after the Federal Reserve announced a third round of quantitative easing to boost economic growth. The central bank stated that it would purchase $40 billion of mortgage-backed securities every month until the labor market improves, while the Federal Open Market Committee (FOMC) stated that it would likely keep the federal funds rate near zero through at least the middle of 2015. Besides, FOMC participants upgraded their estimate for 2013 gross domestic product growth to 2.5 percent to 3 percent, compared with 2.2 percent to 2.8 percent in June. The Federal Open Market Committee, which ended a two-day meeting on Thursday, added that it was concerned that, without the action, economic growth might not be strong enough to generate sustained improvement in labor-market conditions.
In economy news, the number of people who applied for US unemployment benefits jumped sharply last week, mainly because of delayed claims filed by people affected by Tropical Storm Isaac. The effects of the storm aside, claims showed little change in a sluggish US labor market that reflects the reluctance of companies to hire. Initial jobless claims climbed by 15,000 to a seasonally adjusted 382,000 in the week ended September 8, the Labor Department stated. That’s the highest level since mid-July. Separately, a government report had wholesale prices rising in August, illustrating the rise in energy costs. The producer-price index rose a seasonally adjusted 1.7% last month, the Labor Department stated. That’s the biggest increase since June 2009.
The Dow Jones industrial average gained 206.51 points or 1.55 percent to close at 13,539.90. The Standard & Poor's 500 gained 23.43 points or 1.63 percent to 1,459.99 and the Nasdaq composite inched up by 41.51 points or 1.33 percent to 3,155.83.
The Indian ADRs closed mostly in green, Infosys was up by 1.23%, ICICI Bank was up by 1.22%, HDFC Bank was up by 0.87% and Dr. Reddy’s Lab was up 0.73%. On the other hand, MTNL was down by 0.01%.
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