US markets closed higher on encouraging data

The US markets closed higher on Thursday, pushing both the S&P 500 and the Dow industrials back to their best closing levels since markets plunged in late August. On the economy front, the US budget deficit narrowed to $439 billion in fiscal 2015. The deficit is the smallest of Barack Obama’s presidency and the lowest since 2007 in both dollar terms and as a percentage of Gross Domestic Product (GDP). The deficit fell to 2.5% of GDP. Revenues for the year were $3.2 trillion, an increase of 8% over the prior year. The government spent $3.7 trillion in fiscal 2015, up 5%. The government’s budget year runs from October through September. The number of people who applied for US unemployment benefits fell by 7,000 to 255,000 in the week ended October 10, matching the lowest level since 1973. The average of new claims over the past month, meanwhile, declined and stood at 2,250 to seasonally adjusted 265,000. That’s also the smallest amount since 1973. The monthly average smooths out sharp fluctuations in the more volatile weekly report and is seen as a more accurate predictor of labor-market trends. Some 2.16 million people collected weekly unemployment checks in the seven days ended October 3. These so-called continuing claims were down 50,000 from the prior week.

Meanwhile, the consumer price index fell in September for the second month in a row, largely because of another big drop in gasoline prices. The CPI declined by a seasonally adjusted 0.2% last month. Over the past 12 months the main CPI has shown zero increase in unadjusted terms. Core prices are up 1.9% in the same span. Real or inflation-adjusted hourly wages, meanwhile, edged up by 0.1% in September. Real wages have climbed a modest 2.2% in the past 12 months. Separately, two regional manufacturing gauges painted an identical picture in October with both showing a sharp slowing in the industrial sector in the Northeast. The Empire State manufacturing index, which measures conditions in the New York area, stayed in deep negative territory for the third month in a row for the first time since the depths of the Great Recession. At the other end of the New Jersey Turnpike, the Philadelphia Fed’s manufacturing index remained in negative territory for the second straight month. The Empire Index has fallen from a high of 27.4 in September 2014 to negative 11.4 in October. The Philadelphia index hit a high of 40.2 last November and has dropped to negative 4.5.

The Dow Jones Industrial Average added 217.00 points or 1.28 percent to 17,141.75, Nasdaq was up 87.25 points or 1.82 percent 4,870.10, while the S&P 500 gained 29.62 points or 1.49 percent to 2,023.86.

Indian ADRs ended mostly in green, Tata Motors was up 2.06%, HDFC Bank was up by 1.04%, ICICI Bank was up 0.22% and Wipro was up 0.16%. On the other hand, Dr. Reddy’s Lab was down by 0.17%.