US markets closed higher led by rally in tech and bank shares

The US markets closed higher on Tuesday, as rally in financial and technology shares pushed indices up. Tuesday’s rally comes on the heels of hawkish minutes from the Federal Reserve’s latest policy meeting and comments from several officials that rate increases may come as soon as next month. According to the CME Group’s FedWatch tool, Wall Street is pricing in a 38% chance of a June hike and a 58% chance of a July move. On the economy front, sales of new homes surged in April, a sign that builders are stepping up as demand for housing remains robust. Sales soared 16.6% to a seasonally adjusted annual rate of 619,000, the Commerce Department said Tuesday. That was the biggest monthly jump in 24 years and trounced estimates of a 525,000 pace. The median price also jumped, rising 9.7% from 12 months ago to $321,100. The big increase in sales took supply sharply lower. At the current pace, it would take 4.7 months to exhaust all inventory. First-quarter figures were all revised up. Sales so far in 2016 have averaged a 553,500 annual pace, 10% higher than the 503,000 notched in 2015. Regional performance was mixed, from a 52.8% surge in the Northeast to a 4.8% decline in the Midwest. The South saw a 15.8% increase, while in the West sales were up 18.8%.

Meanwhile, strong job creation and a seven-year US economic recovery have helped home owners get in the best shape in years. The number of new foreclosures in the first quarter edge near the lowest level in 17 years. In a new report, the Fed stated that delinquencies of almost all types of debt continued to trend downward, except in some scattered oil-producing regions. Cheaper gas prices have spurred thousands of layoffs in the US energy industry. As a result, mortgage debt grew more slowly in those areas and auto-loan balances fell for the first time since 2011. Trends in the rest of the country were more favorable, though. Repayments increased and just 5% of all outstanding household debt - student loans, credit cards, auto loans, mortgages, home equity lines of credit - was delinquent in early 2016.

The Dow Jones Industrial Average added 213.12 points or 1.22 percent to 17,706.05, Nasdaq was up by 95.28 points or 2.00 percent to 4,861.06, while S&P 500 gained 28.02 points or 1.37 percent to 2,076.06.

The Indian ADRs closed mostly in green; Tata Motors was up 1.10%, HDFC Bank was up 0.28%, Infosys was up 0.20% and Wipro was up 0.05%. On the other hand, Dr. Reddy’s Lab was down by 0.06%.