The US markets ended lower on Monday, in a volatile session as concerns about emerging markets and corporate earnings kept investors on edge. Stocks began the day on a higher note following upbeat results from Caterpillar, but fell after home sales data showed a larger drop in December than anticipated. Investors will now focus on the Federal Reserve this week as the central bank will take center stage on Wednesday. Most observers expect the central bank to cut its bond-buying again, by about $10 million to $65 billion a month. Emerging markets have ridden a wave of liquidity over the past few years as central banks in the developed world, including the Federal Reserve, have pumped money into the global economy. But as the Fed begins to scale back its bond buying this year, investors have been pulling money out of emerging markets, prompting some central banks to intervene.
On the economy front, sales of new single-family homes fell in December, but the whole of 2013 saw the highest sales level in five years. Sales of new single-family homes dropped 7% in December to a seasonally adjusted annual rate of 414,000. December’s numbers represent a 4.5% increase from a year earlier and for all of 2013, new-home sales hit 428,000, the most since 2008. Despite the five-year high, activity remains far below a peak rate of almost 1.4 million in 2005.
The Dow Jones Industrial Average dropped 41.23 points or 0.26 percent to 15,837.88, Nasdaq lost 44.56 points or 1.08 percent to 4,083.61, and the S&P 500 was down by 8.73 points or 0.49 percent to 1,781.56.
Indian ADRs closed in red on Monday; Tata Motors was down by 1.59%, Infosys was down 1.33%, HDFC Bank was down by 0.96%, ICICI Bank was down 0.51% and Dr. Reddy’s Lab was down 0.50%.