The US markets edged lower on Tuesday, as further turmoil in Italian and Spanish markets heightened investor anxiety about the global economic picture. Also, investors are worried about prospects for domestic economic collateral damage as economy grew less than estimated. The Commerce Department stated that the US economy grew at a 2% pace in the third quarter, down from an annualized pace of 2.5% previously estimated. The markets came off their lows and even dabbled briefly in positive territory after the International Monetary Fund offered a new credit to address contagion risks and Federal Reserve minutes showed that some officials favor a further easing of monetary policy. The International Monetary Fund offered two new lending facilities to troubled nations with fewer conditions attached.
Besides, the Fed minutes of meetings revealed that policy makers discussed various options in how to push more liquidity to the economy and debated merits and pitfalls of each action. A few members indicated that they believed the economic outlook might warrant additional policy accommodation, the central bank stated in the minutes released.
Earlier the Super Committee of 12-member panel of House and Senate members failed to agree on a plan to cut at least $1.2 trillion from the US deficit over 10 years. President Barack Obama expressed disappointment with the outcome, but vowed to veto any attempt to undo the automatic spending cuts.
The Dow Jones industrial average lost 53.59 points, or 0.46 percent, to 11,493.70. The Standard and Poor’s 500 closed lower by 4.94 points, or 0.41 percent, to 1,188.04, while the Nasdaq composite lost 1.86 points, or 0.07 percent, to 2,521.28.
The Indian ADRs made a mixed closing on Tuesday, Tata Motors was up by 0.53%, Wipro was up by 0.17% and Sterlite Industries was up by 0.07%. On the flip side, HDFC Bank was down by 0.37% and ICICI Bank was down by 0.05%.
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