US markets rose on hopes about budget-deal

The US markets edged higher on Thursday, as Republican House Speaker John Boehner expressed optimism about reaching a budget deal with President Barack Obama. Boehner stated that he planned to continue working with Obama, even as the Ohio Republican pushed a vote on his plan to limit prospective tax hikes to incomes of more than $1 million. Eric Cantor, the No. 2 GOP leader in the House, added that Republicans have the votes to pass what Boehner dubbed his Plan B, a proposal to extend Bush-era tax cuts for most Americans and replace automatic spending cuts for the military with reduced spending on food stamps and other domestic programs. Besides, there were other good news, the US economy grew more quickly than previously stated in the July-to-September quarter due to stronger trade, faster health-care spending and increased local government construction. The Commerce Department stated that third-quarter gross domestic product grew at a seasonally adjusted annual rate of 3.1% in the third quarter, which is the fastest rate of growth since the 4.1% pickup in the final quarter of 2011. The GDP numbers were well ahead of the government’s initial estimate of 2% growth or even its most recent tally of 2.7%.

There were other good reports on the economic front, the Federal Reserve Bank of Philadelphia’s index of manufacturing activity climbed to an eight-month high in December. Manufacturing activity bounced back in the Philadelphia region in December, according to a closely followed survey released showing a surprising bounce at the end of the year. The Philadelphia Fed index improved to a reading of positive 8.1 in December from -10.7 in November, well above the negative 4.0 reading expected. Besides, the sales of existing homes climbed in November to the highest rate in three years, posting gains in all four regions. The existing home sales rose 5.9% in November to a seasonally adjusted annual rate of 5.04 million, reaching the highest rate since November 2009, the National Association of Realtors reported. Separately, ahead of the opening bell, data showed that weekly jobless claims rose and growth in third-quarter gross domestic product was revised up to 3.1%. The first-time claims for unemployment benefits climbed 17,000 in the latest week, though to a level that suggests the US labor market is continuing its steady but painfully slow improvement. The Labor Department stated that first-time jobless claims rose to a seasonally adjusted 361,000 in the week ended December 15, versus a slightly upwardly revised 344,000 in the prior week.

The Dow Jones Industrial Average gained 59.75 points or 0.45 percent, to close at 13,311.70, the S&P 500 jumped by 7.88 points or 0.55 percent, to finish at 1,443.69, while the Nasdaq edged higher by 6.02 points or 0.20 percent, to end at 3,050.39.

Indian ADRs closed mostly in green on Thursday, HDFC Bank was up by 0.73%, Dr. Reddy’s Lab was up 0.36%, ICICI Bank was up 0.24% and Tata Motors was up 0.11%. On the other hand, Tata Communications was down 0.02%.