US markets closed higher to end week with gains

The US markets closed higher on Friday, with the Dow and S&P 500 witnessing their sharpest reversal in four years, turning sharp opening losses into sizable gains by the end of the session, as investors shrugged off a surprisingly weak jobs report. The number of new jobs created in September slowed sharply for the second straight month, raising the specter that pace of hiring in the US has tapered off amid fresh worries about a weaker global economy and political infighting in Washington. The economy added a seasonally adjusted 142,000 jobs in September, following an even smaller gain in the prior month. The unemployment rate was unchanged at 5.1%, though more people dropped out of the labor force. The percentage of Americans in the labor force fell to the lowest level since October 1977. The disappointing back-to-back employment reports - the worst pair in three years - suggests the labor market cooled off at the end of summer, putting in doubt whether the Federal Reserve raises interest rates at all in 2015. Orders for goods produced in US factories fell 1.7% in August. Orders for durable goods -- products meant to last at least three years -- declined 2.3% in August Orders for nondurable goods fell by 1.1%.

Meanwhile, Federal Reserve Bank of San Francisco President John Williams stated that he sees the central bank raising short-term interest rates this year, perhaps as early as this month, as the economy continues to improve. Williams, a close ally of Chairwoman Janet Yellen, added that the Fed doesn’t need much new economic data before moving; adding that the decision to hold off on raising rates at the central bank’s September meeting was a very close call. Williams’ views are closely monitored as he is seen as a centrist on the Fed’s policy-making committee. The Fed has two more scheduled policy meetings this year, October 27-28 and December 15-16.

Separately, Boston Fed President Eric Rosengren enlightened that Congress may want to add financial stability as an explicit goal of Federal Reserve monetary policy. He added that at the moment, the Fed has two mandates: stable prices and low unemployment levels that don’t stoke inflation. Even having two is controversial: Many central banks, including the European Central Bank, are concerned mainly with keeping inflation low and stable. Rosengren suggested that the Fed should add a third. Rosengren added that he found evidence that past Fed policy makers altered policy decisions based on concerns about financial turmoil.

The Dow Jones Industrial Average rose by 200.36 points or 1.23 percent to 16,472.37, Nasdaq added 80.70 points or 1.74 percent 4,707.78 while the S&P 500 gained 27.54 points or 1.43 percent to 1,951.36.

Indian ADRs ended in green, Tata Motors was up by 1.03%, HDFC Bank was up by 0.67%, Dr Reddy’s Lab was up by 0.57%, ICICI Bank was up 0.23% and Wipro was up by 0.18.