The US markets closed higher on Tuesday, pushing the S&P 500 index to a five-year high, buoyed by a rise in corporate deal activity and an improvement in German investor sentiment, as a gauge of German investor confidence climbed to the highest level since April 2010. Meanwhile, President Barack Obama repeated at a conference that his balanced approach of spending cuts and tax hikes is the best way to replace automatic spending cuts scheduled to take effect on March 1. The across-the-board automatic spending cuts, known as the sequester would cut $1.2 trillion over the next decade and slice $85 billion out of government budgets over the next seven months. Republicans have rejected any tax hikes as part of the plan. Besides, Democrat Erskine Bowles and Republican Alan Simpson are calling for steps to cut the deficit by $2.4 trillion during the next decade. The Bowles-Simpson team is back with a new deficit-reduction plan. The White House stated that it is willing to reduce the deficit by $1.5 trillion over 10 years to get to a total of $4 trillion including previously agreed deals; House Republicans haven’t unveiled the size of deficit-reduction they’re seeking, but their plan to get to balance in 10 years would likely add up to $4 trillion.
On the economy front, a gauge of confidence among homebuilders declined in February for the first time in ten months on lighter prospective-buyer traffic and lower sales of single-family homes, according to data released. The National Association of Home Builders/Wells Fargo housing-market index ticked down to 46 in February from 47 in January.
The Dow Jones Industrial Average gained 53.91 points or 0.39 percent to 14,035.70, the Nasdaq added 21.56 points or 0.68 percent to 3,213.59 and the S&P 500 was up by 11.15 points or 0.73 percent to 1,530.94.
Indian ADRs closed mostly in green on Tuesday, HDFC Bank was up 1.04%, Infosys was up by 0.85%, Tata Motors was up 0.54% and ICICI Bank was up 0.47%. On the flip side, Dr. Reddy’s Lab was down 0.02%.
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