US markets close flat as labor productivity rise

The US markets closed mostly up on Wednesday, with the Dow industrials and S&P 500 ending higher for a fourth day as Wall Street adopted a cautious tone. The optimism in the market was supported as Hewlett-Packard Company hiked its third-quarter earnings forecast and labor productivity rose more than estimated in the second quarter. The labor productivity in the US rose more than anticipated in the second quarter, according to a report released by the US Bureau of Labor Statistics. The report stated that nonfarm business sector labor productivity increased 1.6% in the second quarter following a revised 0.5% drop in the first quarter. The increase in productivity reflects increases of 2.0% in output and 0.4% in hours worked. Earlier, the benchmark gauges fell after Federal Reserve Bank of Dallas President Richard Fisher stated that adequate economic stimulus is already in place and global central banks may not have the capacity to undertake additional measures to boost growth.

In Europe, the Bank of England lowered its growth outlook for the year and stated that output declined in the second quarter to 0.7% and the growth in the third quarter is likely to be weaker than earlier estimate. The central bank also stated output is not likely to increase pre-crisis level until 2014. Besides, ratings agency Standard & Poor’s lowered its outlook on Greece's long-term credit rating to negative from stable. The agency forecast the country’s GDP to contract 10% to 11% cumulatively in the two years to 2013 compared to 4% to 5% contraction estimated by troika lenders. The report predicted the country would require additional financing of up to €7 billion or 3.7% of GDP for 2012 if the economy deteriorates. In separate economic news, Germany’s industrial production and France’s business sentiment index fell in June.

The Dow Jones industrial average gained 7.04 points, or 0.05 percent, to 13,175.60. The S&P 500 Index gained 0.87 points, or 0.06 percent, to 1,402.22, while the Nasdaq Composite was down by 4.61 points, or 0.15 percent, to 3,011.25.

The Indian ADRs closed mixed on Wednesday, Tata Motors was up 0.17%, HDFC Bank was up 0.11% and Infosys was up 0.06%. On the other hand, ICICI Bank was down 0.38% and Tata Communications was down 0.17%.