US markets snap Thursday's session with mild losses

The US markets closed with mild losses on Thursday, as speculation of a breakthrough in Europe’s efforts to resolve its debt crisis fueled a late-session recovery. Besides, Thursday’s economic data had initial jobless claims falling by 6,000 to 386,000 last week, with first-quarter US economic growth again pegged at 1.9%, unchanged from the government’s prior forecast of gross domestic product. New claims for unemployment fell, according to data released by the Labor Department. Initial unemployment claims at a seasonally adjusted level decreased 6,000 to 386,000 for the week ending June 23 from the previous week's level of 392,000, revised up from the 387,000 initially reported. Also, the US economy expanded at an annual rate of 1.9% in the first quarter compared to the 3% growth in the fourth quarter, according to data released by the Commerce Department. The price index of gross domestic purchases increased 2.6% in the first quarter compared to 1.1% in the fourth quarter. Personal consumption expenditures increased 2.5% in the first quarter from 2.1% in the fourth quarter.

The European leaders gathered for another summit in Brussels where the European Union leaders agreeing to spend 120 billion euros to stimulate growth and create jobs. The European Union leaders struggled to meet demands by Spain and Italy for relief from rising borrowing costs, threatening to derail a 120 billion-euro ($149 billion) pledge to boost economic growth. Italy is withholding its official endorsement of the initiative as it seeks collective action at an EU summit in Brussels to lower its bond yields. Leaders from the 17 euro nations stayed on to debate the crisis-fighting plan after all 27 nations informally signed off on the growth strategy. Spain, the current center of the crisis is slowly but steadily drifting to requesting a bailout that may exceed 400 euro billion committed for the governments of Ireland, Greece and Portugal combined. Besides, Euro-zone economic confidence fell to a 32-month low in June, a European Commission report showed. The economic confidence index fell to 89.9 in June, the lowest since October 2009, from 90.5 in May.

The Dow Jones Industrial Average closed lower by 24.75 points or 0.20%, at 12,602.30. The S&P 500 finished the day down by 2.81, or 0.21%, to 1,329.04 while the Nasdaq closed down by 25.83 points or 0.90%, to 2,849.49.

The Indian ADRs closed mostly in red; Infosys was down by 0.43%, Dr. Reddy’s Lab was down 0.19% and HDFC Bank was down 0.18%. On the flip side, Tata Motors was up 0.24% and Tata Communications was up 0.16%.