The US markets dropped on Thursday, with Dow Jones Industrial Average suffering its biggest point decline since October 8. The blue-chip index finished near its session low following a surprise interest-rate cut in Europe and despite better-than-expected estimate on US third-quarter GDP. The US expanded by a 2.8% annual pace in the third quarter, matching the biggest increase in a year aided by a large buildup in business inventories and an improved trade picture. Yet consumer spending, the main engine of the US economy, slowed to a 1.5% increase from 1.8% in the second quarter, indicating the economy entered the fourth quarter with little momentum. On the positive side, investment in the housing sector remained strong with a 14.6% increase and exports outpaced imports. Exports rose 4.6% vs. a preliminary 1.9% increase in imports.
Also, the number of Americans who applied to receive unemployment benefits fell for the fourth straight week, but initial claims remained above end-of-summer levels, a possible sign of slight deterioration in the US labor market over the past few months. The Labor Department stated that initial jobless claims declined by 9,000 to a seasonally adjusted 336,000 in the week ended November 2. Claims are seen as good proxy for the rate of layoffs occurring in the economy. US consumer credit showed steady growth in September, the Federal Reserve reported. US consumers increased their debt in September by a seasonally adjusted $13.7 billion, down slightly from a revised $14.2 billion gain in August, but very close to the average gain over the past six months.
Meanwhile, William Dudley, the president of the New York Federal Reserve Bank stated that many large financial institutions display an apparent lack of respect for law, regulation, and the public trust. The New York Fed president added that he hoped government efforts to end the too-big-to-fail culture and shift bank focus to longer-term sustainability would foster the needed change.
The Dow Jones Industrial Average dropped 152.90 points or 0.97 percent to 15,594.00, the S&P 500 was down 23.34 points or 1.32 percent to 1,747.15, while Nasdaq lost 74.61 points or 1.90 percent to 3,857.33.
Indian ADRs closed mostly in red on Thursday; Tata Motors was down 1.71%, ICICI Bank was down 0.97%, HDFC Bank was down 0.90% and Dr. Reddy’s Lab was down 0.50%. On the other hand, Infosys was up 0.09%.
