US market rally on encouraging economic data

The US markets rallied on Wednesday, breaking a four-session losing streak for the Dow Jones Industrial Average and S&P 500, lifted by Chinese and European data and an expansion in US manufacturing. The Institute for Supply Management, showed business at US manufacturers expanded in January at the fastest pace in eight months. Separately, the Commerce Department reported builders increased spending for a fifth straight month in December, with construction expenditures up 1.5%. Ahead of the market opening, Automatic Data Processing Inc. released private-sector payrolls data showing US employers added 170,000 jobs last month. The data comes ahead of Friday’s monthly nonfarm payrolls report from the Labor Department. However, the Congressional Budget Office projected that the 2012 federal budget deficit will be about $1.1 trillion, and that the economy will continue its sluggish recovery, with unemployment remaining above 8% both this year and next. The projected deficit represents 7% of US GDP that is nearly 2 percentage points below the deficit recorded in 2011 but still higher than any annual deficit between 1947 and 2008. Investor optimism also came with talk that Greece is going to work out a deal as far as their debt is concerned. Besides, Germany and Portugal completed bond auctions at lower yields.

The Dow Jones Industrial Average closed higher by 83.55 points, or 0.66 percent, at 12,716.50. The S&P 500 was up by 11.68 points, or 0.89 percent, at 1,324.09, while the Nasdaq closed up 34.43 points, or 1.22 percent, at 2,848.27.

Indian ADRs closed mixed on Wednesday, Tata Motors was up 0.96%, HDFC Bank was up by 0.58%, Sterlite Industries was up 0.55% and Infosys Technologies was up 0.48%. On the flip side, MTNL was down by 0.01%.