US markets closed lower on Thursday

The US markets closed lower on Thursday, as a sharp drop in oil and telecommunications shares weighed on investors’ sentiment. Investors also grappled with a mixed bag of economic data, earnings results, a steep drop in crude-oil prices, the prospect of a rate increase by the Federal Reserve and tumult wrought by the US presidential election. Federal Reserve Bank of New York President William Dudley stated that he expects the central bank will be able to raise interest rates before year-end, but the job this year should be more predictable than when it did so last December. Dudley added that Fed is closing in on its monetary policy objectives that should allow for a follow-up interest-rate increase this year. Dudley expects to see an interest rate rise later this year, adding that market participants and the economy should be able to absorb such a move.

On the economy front, the number of people who applied for unemployment benefits last week climbed 13,000 to 260,000 to match a six-week high, though the pace of layoffs in the US remains exceedingly low. The biggest increases in claims happened in California, Pennsylvania, Texas and New York, states unaffected by a major hurricane earlier in the month. Two weeks ago new claims fell to 246,000, marking the lowest level in 43 years. Initial claims have been below the key 300,000 threshold for 85 straight weeks, a feat that last occurred in 1970. The less volatile four-week average of initial claims, seen as a more accurate measure of labor-market trends, rose slightly to 251,750. Continuing jobless claims increased by 7,000 to 2.06 million in the week ended Oct. 8 but clung near a 16-year low.

On the other hand, manufacturing activity pulled back modestly in the Philadelphia region, but details of the report eased concerns about the durability of the factory sector. The Philadelphia Federal Reserve Bank’s monthly index on regional manufacturing fell to 9.7 in October from 12.8 in September, which was the highest reading in 19 months. The gauge of new orders jumped to 16.3 in October from 1.4 in the prior month. That is the highest level since November 2014. The shipments index rose 24 points to 15.3. The US is growing at a moderate pace and will continue to do so early next year, according to an index that measures the nation’s economic health. The leading economic index rose 0.2% in September. The LEI is a weighted gauge of 10 indicators designed to signal business-cycle peaks and valleys. Five of the 10 components expanded in September. A measure of current conditions increased 0.2%.

The Dow Jones Industrial Average lost 40.27 points or 0.22 percent to 18,162.35, Nasdaq dropped 4.58 points or 0.09 percent to 5,241.83, while S&P 500 was down 2.95 points or 0.14 percent to 2,141.34. 

The Indian ADRs closed mostly in red; Tata Motors was down 0.49%, Wipro was down 0.14% and Infosys was down 0.10%. On the other hand, ICICI Bank was up 0.26% and HDFC Bank was up 0.02%.