US markets closed higher; snaps 3-day losing streak

The US markets closed higher on Thursday, snapping a three-day slump that was driven by plunging oil prices. The Federal Reserve is widely expected to raise interest rates for the first time in almost a decade next week at its two-day policy meeting starting December 15. On the economy front, the US government ran a budget deficit of $65 billion in November, an increase of $8 billion, or 14%, from a year ago. For the second month of the fiscal year, the government spent $270 billion, up 9% from November 2014. Total receipts were $205 billion, an increase of 7%. The November deficit would have been $126 billion if not for the shifts in the timing of some payments. Certain benefit payments, for example, were made in October instead of November. For the fiscal year to date, the deficit is $201 billion, up 13% from the same period a year ago. The federal government’s budget year runs from October through September. The number of Americans getting laid off from their jobs rose to the highest level in five months, suggesting, at least on the surface, that the labor market could be slowing down. Initial claims jumped by 13,000 to 282,000 in the period ended December 5. This was the highest level since the week of July 4. Claims have come in under the key 300,000 level for 40 weeks. The average of new claims over the past month edged up by 1,500 to 270,750. The four-week average smooths out sharp fluctuations in the more volatile weekly report and is seen as a more accurate predictor of labor-market trends. Meanwhile, continuing jobless claims rose by 82,000 to 2.24 million in the week ended November 28. This was the biggest rise in a year. These claims, reported with a two-week lag, reflect people already collecting unemployment checks.

Meanwhile, the prices Americans paid for imported goods declined 0.4% in November, driven by a 2.5% plunge in energy prices. Import prices have fallen every month in 2015 except May and June. Excluding energy, prices declined 0.2%. Energy prices were down 24.9% in November compared to the same period a year ago. Lower prices on imported goods may be helping consumers’ purchasing power, but they’re complicating the work of the Federal Reserve, which wants to see inflation at a healthy 2% pace. Export prices fell 0.6% in November, thanks in part to a 1.1% decline in agricultural prices. Those prices are 12.8% lower compared to year-ago levels. Separately, the third quarter saw the lowest growth in borrowing in over four years, as businesses slowed their breakneck accumulation of debt, while the downturn in the stock market wiped away over $1 trillion in household wealth. Domestic nonfinancial debt grew at a seasonally adjusted annual rate of 2%. Business debt grew 4.7% in the third quarter, compared to 8.4% growth in the second quarter. That was the slowest pace of growth since the fourth quarter of 2013 and comes ahead of a likely rise in interest rates next week.

The Dow Jones Industrial Average added 82.45 points or 0.47 percent to 17,574.75, the Nasdaq was up 22.30 points or 0.44 percent to 5,045.17 and the S&P 500 gained 4.61 points or 0.23 percent to 2,052.23.

The Indian ADRs closed mostly in green; Dr. Reddy’s Lab was up by 0.84%, HDFC Bank was up by 0.51% and Infosys was up 0.31%.  On the other hand, Tata Motors was down 0.02% and Wipro was down by 0.01%.