The US markets closed flat on Tuesday, after a two-session surge, as Federal Reserve Chairman Ben Bernanke urged lawmakers to make a deal and end uncertainty over the so-called fiscal cliff of scheduled spending cuts and tax hikes. In a speech in New York, Bernanke stated that Washington needs to resolve the uncertainty over US tax and spending policy weighing on consumers, businesses and markets. The confusion over the course of US tax and spending policy is weighing on the spending decisions of households and businesses, as well as on financial markets, Bernanke made in remarks to the New York Economic Club. Bernanke added that without action by the White House and Congress on the fiscal cliff, about $500 billion in spending cuts and tax increases are set to begin in 2013.
Besides, Hewlett-Packard Company skidded after the Dow component reported fourth-quarter revenue below expectations and earnings above estimates, but only after excluding a large accounting charge tied to alleged fraud by an acquired company. On the economy front, the Commerce Department stated that construction of new homes unexpectedly rose to the highest in more than four years in October. The housing starts rose 3.6 percent to a 894,000 annual rate, the fastest since July 2008 and exceeding all estimates.
In Europe, governments are trying to plug an immediate hole in Greece’s finances and prevent new ones from opening in the latest installment of the debt-crisis brinkmanship rattling the euro economy. Finance ministers are battling among themselves and with the International Monetary Fund to find 15 billion euro through 2014 for Greece and seek an elusive formula for putting its debt on a sustainable path. Separately, Bank of England policy maker Martin Weale stated that the rate of UK inflation remains a concern and more stimulus may add to pressure at a time when consumer-price growth exceeds the central bank’s goal.
The Dow Jones Industrial Average lost 7.45 points, or 0.06 percent, to close at 12,788.50, the S&P 500 finished up by 0.92 points, or 0.07 percent at 1,387.81, while the Nasdaq ended higher by 0.61 points, or 0.02 percent to settle at 2,916.68.
Indian ADRs closed mostly in red on Tuesday, Infosys was down 1.22%, Dr. Reddy’s Lab was down 0.29%, Tata Communication was down 0.24% and Tata Motors was down 0.23%. On the other hand, HDFC Bank was up 0.23%.