The US markets declined again on Thursday, pushing indexes to lows not seen since late summer, as worries about the global economy and US fiscal cliff displaced enthusiasm that came with upbeat economic reports. Investors still considered that the political landscape after an election that had President Barack Obama re-elected and Congress still divided, with the fiscal cliff, or more than $600 billion in tax hikes and spending cuts, scheduled for January unless lawmakers reach a deficit-reduction agreement. Besides, Standard & Poor's stated that there’s a 15% chance the US will go over the so-called fiscal cliff, triggering a series of tax hikes and spending cuts that will go into effect unless Congress can avoid doing so. S&P also stated that unemployment would go over 9% by the end of next year if the cliff is triggered. Meanwhile, the number of Americans who filed new applications for unemployment benefits fell modestly last week, but the data was distorted by Hurricane Sandy. Initial claims declined by 8,000 to a seasonally adjusted 355,000 in the week ended November 03. Initial claims from two weeks ago were unrevised at 363,000, based on more complete data collected at the state level.
In Europe, the European Central Bank held interest rates steady and ECB President Mario Draghi stated that the economic forecast had worsened with the central bank still ready to start its bond-buying plan if governments meet the required conditions. Besides, the Ifo Economic Climate Indicator for the euro area dropped to 81.7 in the fourth quarter from 88.9 in the third quarter as assessments of the current economic situation deteriorated and the six-month economic outlook was significantly more negative. Inflation estimates in the euro zone increased to 2.4% in 2012 from 2.2%, according to the survey.
The Dow Jones Industrial Average lost 121.41 points, or 0.94 percent, to close at 12,811.30, the S&P 500 finished down by 17.02 points, or 1.22 percent at 1,377.51, while the Nasdaq ended lower by 41.70 points, or 1.42 percent to settle at 2,895.58.
Indian ADRs closed mixed on Thursday, ICICI Bank was down 0.47%, Infosys was down 0.42% and Dr. Reddy’s Lab was down 0.27%. On the other hand, Tata Motors was up by 1.23% and Sterlite Industries was up by 0.07%.
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