US markets edge mostly higher on good earning reports

The US markets edged mostly higher on Wednesday, as investors cheered decent corporate earnings reports considering results from several banks including J.P. Morgan Chase & Co. and Goldman Sachs Group Inc. against worries about the debt ceiling and global economic growth. J.P. Morgan Chase reported fourth-quarter profit that exceeded estimates and 2012 revenue down from the prior year while Goldman Sachs’ quarterly profit nearly tripled. In a separate release, the Fed’s Beige Book survey from its 12 districts found increased economic activity in December, with rising home and car sales cited as factors. The US economy expanded at either a modest or moderate pace across the country into early January, as spending and hiring were held down by concerns over fiscal policy, according to the latest Federal Reserve Beige Book survey released. Concerns about tax and spending policies also impacted housing in at least one region, the survey found. Manufacturing activity was mixed with three of the 12 Fed regions reported a decline in factory output. Fed officials will meet on January 29-30 to set monetary policy for the next six weeks.

Besides, Richard Fisher, the president of the Dallas Federal Reserve Bank stated that Washington must turn its attention to resolving the threat to the economy from the dozen banks that are too-big-to-fail. Richard Fisher added that he will put forward a plan to split the big banks into multiple smaller businesses and also make clear that federal deposit insurance would only cover deposits at the commercial bank unit of each bank’s holding company. Separately, the World Bank sharply curtailed its forecast for global growth in 2013, warning of the negative impact of the political battle in the US over spending cuts and raising the nation’s debt limit.

On the economy front, the Federal Reserve reported that US industrial production rose for a second month in December on increased demand for business equipment. Federal Reserve stated that factory output increased 0.8% in December from a month ago after rising 1.3% in November. Total industrial production increased 0.3% in December after rising 1% in November and the growth declined after utilities output dropped 4.8% on warmer than usual weather. Besides, consumer prices for US goods and services were flat in December, held in check again by declining gasoline costs. The consumer price index was unchanged last month on a seasonally adjusted basis, the Labor Department stated.

The Dow Jones Industrial Average lost 23.66 points or 0.17 percent to 13,511.20, the Nasdaq added 6.77 points or 0.22 percent to 3,117.54 and the S&P 500 closed higher by 0.29 points or 0.02 percent to 1,472.63.

Indian ADRs closed mostly in red on Wednesday, HDFC Bank was down 1.21%, MTNL was down 0.91% and ICICI Bank was down 0.65%. On the other hand, Infosys was up 0.33% and Dr. Reddy’s Lab was up 0.29%.