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US markets jump on good economic data

02 Nov 2012 Evaluate

The US markets jumped on Thursday, supported by a string of positive data from the US which buoyed hopes that the global economic recovery remains on track. The manufacturing expanded more than forecast, consumer confidence rose to a four-year high and fewer Americans filed claims for unemployment benefits, pointing to resilience in the economy heading into the fourth quarter. Led by brighter views on present employment and business conditions, the Conference Board’s gauge of consumer confidence jumped in October to the highest level since February 2008. The Conference Board stated that the consumer-confidence index increased to 72.2 last month from a downwardly revised 68.4 in September. Also, American manufacturers grew at slightly faster pace in October as orders showed marked improvement, according to a closely followed survey.

The Institute for Supply Management’s index of purchasing managers - the executives who order raw materials and other goods - edged up to 51.7% from 51.5% in September and a three-year-low of 49.6% in August. A reading above 50% signals expansion. Besides, the Labor Department stated that weekly applications for unemployment benefits fell by 9,000 to a seasonally adjusted 363,000 in the week ended October 23. The number of new applicants for unemployment benefits fell slightly last week but it remained stuck in a narrow range suggesting little change in US hiring patterns over the past few months.

In Europe, the euro zone finance ministers urged Greece to finalize the agreement with international lenders before the release of next tranche of loan however the coalition government is not able to muster enough support for the approval in the Parliament. Besides, Greek manufacturing activity declined in October, data from a survey by Markit Economics showed. The seasonally adjusted purchasing managers’ index for the manufacturing sector dropped to 41 October from 42.2 in September, the lowest in four months.

The Dow Jones Industrial Average gained 136.16 points, or 1.04 percent, to close at 13,232.60, the S&P 500 finished up by 15.43 points, or 1.09 percent at 1,427.59, while the Nasdaq ended higher by 42.83 points, or 1.44 percent to settle at 3,020.06.

Indian ADRs closed in green on Thursday, Tata Motors was up 1.37%, Wipro was up 0.89%, ICICI Bank was up 0.83%, Dr. Reddy’s Lab was up by 0.61% and Infosys was up by 0.50%.

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