US markets rose on encouraging economic reports

The US markets rose for the second day in a row on Wednesday, after durable goods orders rose for the first time since February and pending home sales increased. The orders for goods that are expected to last at least three years increased 1.1% in May, the first gain since February according a government report. The orders increased after a revised 0.2% drop in April. For the year to the month, orders declined 6.8% in the first four months and though the orders improved in May the trend for consumer spending is still soft. Besides, pending home sales increased 5.9% in May after falling 5.5% in April according to the industry association. Housing market appears to be in a slow recovery mode and pending sales increased 15.3% in May after rising 14.7% in April. Contracts of home sales across the nation and were led by 14.5% surge in the West.

In Europe, the pressure on European leaders intensified as Spain slides closer to a bailout as the recession deepens and government faces unsustainable cost of debt refinancing. The Spain’s Prime Minister Mariano Rajoy warned that the nation cannot finance government debt for a long time at prices like those that they are now paying in a speech to Parliament. Spain is likely to force to accept a bailout in the next few months as bond markets exact interest rates that the government cannot afford to pay. Spanish economy is two times larger than the combined economies of Ireland, Greece and Portugal but the calls for the pooling of member nations debt in the shape of eurozone bonds to quickly relieve market pressure has met stiff resistance from German Chancellor Angela Merkel.

The Dow Jones Industrial Average closed higher by 92.34 points or 0.74%, at 12,627.00. The S&P 500 finished the day up by 11.86, or 0.90%, to 1,331.85 while the Nasdaq closed up by 21.26 points or 0.74%, to 2,875.32.

The Indian ADRs closed mostly in green; ICICI Bank was up 0.69%, Infosys was up by 0.69% and Dr. Reddy’s Lab was up 0.30%. On the flip side, Tata Motors was down 0.23% and Tata Communications was down 0.12%.