US markets closed mixed despite better-than-expected retail sales data

The US markets made a mixed closing on Monday, with better-than-expected retail sales bolstering optimism, but a slide in the shares of Apple Inc. and Google Inc. dragging on the broader indices. Besides, optimism on the economic outlook was tempered by other data showing that confidence among US homebuilders declined and manufacturing in the New York region expanded in April at the slowest pace in five months. Ahead of the opening bell, the Commerce Department stated that retail sales climbed 0.8% in March, following revised increases of 1.0% in February and 0.7% in January. Retail sales in the US rose more than forecast in March as Americans snapped up everything from cars and furniture to clothes and electronics.  Americans spent on a wide range of goods and services in March for the third straight month, suggesting the US economy grew somewhat faster than expected in the first quarter. The consumer spending accounts for as much as 70% of US economy so the recent upsurge in spending likely means the nation’s growth in gross domestic product for the first quarter will be faster than expected.

However, a gauge of manufacturing in the New York region signaled a potential moderation in factory activity. The New York’s Empire State index dropped to 6.56 in April from 20.21 in March, a reading that also was much slower than the 18 projected. A reading of New York area manufacturing conditions pointed to a significant slowdown in April, as purchasing managers reported slowing shipment growth and falling unfilled orders. Also, homebuilder confidence in the US declined in April, according to a report released by the National Association of Home Builders. The report showed that the NAHB/Wells Fargo Housing Market Index dropped to 25 in April from 28 in March.

In Europe, Spain was in focus after yields rose above 6%, the record high for the year and raising prospects of anther debt squeeze in the euro zone. The credit default swap for Spanish 5-year debt shot up to a new high and premium to the German bund rose to a high seen last in summer of 2011. While, euro-zone's trade balance swung to surplus of €2.8 billion in February compared to a revised €7.9 billion deficit in January.

The Dow Jones Industrial Average closed higher by 71.82 points, or 0.56 percent, at 12,921.40. The S&P 500 lost 0.69 points, or 0.05 percent, at 1,369.57, while the Nasdaq was down by 22.93 points, or 0.76 percent, at 2,988.40.

Indian ADRs closed mixed on Monday, Tata Motors was up 0.93%, Dr. Reddy’s Lab was up 0.37% and ICICI Bank was up 0.21%. On the flip side, Infosys Technologies was down 1.66% and Wipro was down 0.18%.