US markets closed higher on Thursday

The US markets closed considerably higher on Thursday, near their intraday highs, as an Apple-inspired rally in the tech sector helped to lift the broader market following a deluge of macroeconomic reports. The three main benchmarks marked their fourth move of at least 1% in the past five sessions, after more than a month of torpor as volatility escalates in September. The US central bank is widely expected to hold fire next week when it meets, with the CME FedWatch Tool pointing to an only 15% probability of a rate increase. However, for the December meeting, the probability currently stands at almost 53%. The Atlanta Federal Reserve’s GDP Now forecast model showed that the US economy is on track to grow at a 3.0 percent annualized rate in the third quarter, following the latest data on retail sales and government spending. The latest third-quarter GDP estimate was lower than the 3.3 percent figure calculated on September 9.

On the economy front, some 260,000 people applied for unemployment benefits in early September week stretching from September 4 to September 10, up 1,000 from the prior week but still near the lowest level in decades. Initial jobless claims slipped below 300,000 in 2015 and have stayed there for 80 straight weeks, the longest stretch since 1970. The low level of layoffs is a reflection of a tightening labor market in which unemployment has fallen below 5% and companies increasingly complain they cannot find enough skilled workers. Continuing jobless claims, meanwhile, rose by 1,000 to 2.14 million in the week ended September 3. The US current-account deficit, a measure of the nation’s debt to other countries, sank 9.1% in the second quarter to $119.9 billion. The decline mostly stemmed from an increase in investment in US assets such as stocks and bonds. The current account reveals if a country is a net lender or debtor. The current account deficit was 2.6% of GDP in the second quarter. That’s down from 2.9% in the first quarter and well below a record of 6.3% in 2005. The current-account deficit in the first quarter was revised up to $131.8 billion from $124.7 billion. The Philadelphia Fed’s manufacturing index slowed to a reading of 12.8 in September, well below the 2 in August.

On the other hand, sales at US retailers fell in August for the first time in five months as traffic dropped off for most stores, a sign that third-quarter growth might not be as strong as previously estimated. Retail sales declined a seasonally adjusted 0.3%. Receipts at auto dealers slipped 0.9% in a disappointing month that spurred some industry leaders to predict sales are unlikely to top last year’s record. Sales surged in the past few years as millions of Americans upgraded to new cars and trucks to replace aging vehicles they had held onto in the wake of a devastating recession. Industrial production contracted in August after a promising expansion in the previous two months. Industrial production fell 0.4% in August after a revised 0.6% rise in the prior month and a revised 0.5% gain in June. The Empire State manufacturing index, which measures conditions in the New York area, held in contraction territory, inching up to negative 2 in September compared to negative 4.2 in August.

The Dow Jones Industrial Average added 177.71 points or 0.99 percent to 18,212.48, Nasdaq gained 75.92 points or 1.47 percent to 5,249.69, while S&P 500 was up 21.49 points or 1.01 percent to 2,147.26. 

The Indian ADRs closed mostly in green; HDFC Bank was up 0.52%, Infosys was up 0.09% and Wipro was up 0.06%. On the other hand, ICICI Bank was down 0.03% and Dr. Reddy’s Lab was down 0.02%.