The US markets climbed higher on Tuesday, extending their four-day winning streak, as Federal Reserve Chairwoman Janet Yellen pledged to keep interest rates low and to continue to taper the pace of bond purchases if the economy keeps improving. Janet Yellen stated that markets should expect the central bank to continue to follow the low-interest-rate path laid out by her predecessor Ben Bernanke. Yellen added that the central bank would taper the pace of its asset purchases at future meetings if the economy continued to improve as expected, although the pullback was not on a preset course. The Fed’s decisions about the pace of tapering are data dependent. She also enlightened that Fed plans to hold short-term interest rates at zero well past the time the jobless rate falls below 6.5%.
On the economy front, a gauge of optimism among small businesses ticked up one-fifth of a point to 94.1 in January, led by sales expectations and hiring plans. Among the 10 components of the National Federation of Independent Business’s gauge, three rose last month, five fell and two were unchanged. US wholesale inventories climbed 0.3% in December while wholesale sales rose 0.5%. At December’s sales pace, the inventory-to-sales ratio was unchanged at 1.17 months. Inventories of durable goods increased 1.3%, but inventories of nondurables fell 1.3%. In November, inventories grew an unrevised 0.5% while sales advanced 1.0.
Separately, a gauge of competition for jobs fell in December to the lowest level in more than five years, but the US labor market remained weak and it’s too soon for workers to celebrate. There were 10.35 million jobless workers at the end of 2013, compared with 3.99 million job openings, translating to about 2.6 would-be workers per spot. That ratio, down a bit from 2.7 in November, was the lowest since August 2008.
The Dow Jones Industrial Average gained 192.98 points or 1.22 percent to 15,994.77, Nasdaq added 42.88 points or 1.03 percent to 4,191.05, and the S&P 500 was up by 19.91 points or 1.11 percent to 1,819.75.
Indian ADRs closed mostly in green on Tuesday; Infosys was up 1.04%, ICICI Bank was up 0.86% and HDFC Bank was up 0.81%. On the other hand, Dr. Reddy’s Lab was down 0.21%.
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