The US markets closed lower on Monday, as investors braced for what’s expected to be a weak earnings season. Investors are anticipating that this earnings season threatens to be one of the roughest since US companies started to pull themselves out of the Great Recession - even if, as usual, results don’t live up to the worst of the gloom-and-doom forecasts. Companies are finding fewer places to cut costs. The Dow component and aluminum producer Alcoa Inc. is slated to release quarterly results after the close of regular US trading on Tuesday. Besides, the International Monetary Fund revised down its projections for global growth for this year and next, citing lower growth prospects and higher risks. The IMF cut its 2012 global growth forecast to 3.3% from a 3.5% forecast made in July, and its 2013 forecast to 3.6% from 3.9%. The failure to act to control Europe’s debt crisis or tackle the impending fiscal cliff in the United States will make growth prospects much worse, the IMF warned.
In Europe, the finance ministers are gathering to discuss how a tighter banking cooperation will overhaul the functioning of sovereign bond market and whether the member nations are ready to meet the demand from Spain if the struggling nation requests a bailout. Besides, the 17-country euro area economy will contract 0.4% this year, 0.1% point worse than forecast in July, and grow 0.2% in 2013, less than the 0.7% predicted three months ago, the IMF stated. Separately, the confidence improved in the euro zone in October and German exports rose unexpectedly in August. The French economy is estimated to decline 0.1% in the third quarter and Swiss jobless rate was unchanged in September.
The Dow Jones Industrial Average lost 26.50 points, or 0.19 percent, to close at 13,583.70, the S&P 500 finished down by 5.05 points, or 0.35 percent at 1455.88, while the Nasdaq ended lower by 23.83 points, or 0.76 percent to settle at 3112.35.
Indian ADRs closed mostly in red on Monday, Infosys was down by 0.86%, Tata Motors was down by 0.85%, ICICI Bank was down by 0.70% and HDFC Bank was down 0.39%. On the other hand, Tata Communications was up 0.10%.
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