US markets closed mostly up; Nasdaq ended in red

The US markets closed mostly higher on Wednesday, though selling of shares in internet companies and high-growth companies resulted in a loss on the Nasdaq Composite. Federal Reserve Chairwoman Janet Yellen stated that the US economy will end the year in better shape despite the slow start in the first quarter, but recent weakness in the housing market bears watching. Yellen added that the weak first quarter growth rate was mostly due to weather. She expects growth will expand at a somewhat faster pace this year than the 1.9% growth rate seen in 2013. Yellen continues to expect housing to pick up. Yellen was clear about the central bank’s asset purchase program, saying that it would end in the fall if the economy stays on course.

On the economy front, slower economic growth caused in part by brutal winter weather led to a sharp decline in US productivity in the first quarter. The productivity of American businesses fell at a 1.7% annual rate from January through March. As a result, unit-labor costs jumped by 4.2% to mark the biggest increase in five quarters. They have risen at a smallish 0.9% annual rate, however, in the 12 months ended March 31, indicating that labor costs remain contained. The unit-labor cost reflects how much it costs a business to produce one unit of output, such as a crate of toys or a ton of aluminum.

Separately, US consumer credit growth accelerated in March to its fastest pace in a little over a year. US consumers increased their debt in March by a seasonally adjusted $17.5 billion, the fastest pace since February 2013. Monthly debt rose at a 6.7% annual rate in March, compared with a 5.0% rate in the prior month. Consumer debt has risen every month since August 2011.

The Dow Jones Industrial Average was up by 117.52 points or 0.72 percent, to 16,518.54, the S&P 500 added 10.49 points or 0.56 percent, to close at 1,878.21 while, the Nasdaq Composite lost 13.09 points or 0.32 percent, to 4,067.67.

The Indian ADRs closed mixed on Wednesday; HDFC Bank was up 0.41%, Tata Motors was up 0.37% and Dr. Reddy’s Lab was up 0.18%. On the other hand, Infosys was down by 1.99% and Wipro was down 0.23%.