US markets gain on back of good economic reports

The US markets closed with modest gains on Wednesday, following upbeat data on US private-sector job growth and activity in the services sector. However, blue-chips struggled during the session as Hewlett-Packard Company plunged to multi-year lows after the company’s disappointing forecast underscored concerns about corporate profitability ahead of the start of earnings season. Meanwhile, the US economy added 162,000 private-sector jobs in September. The report from payrolls processing firm ADP came in slightly stronger than the 152,000 compiled consensus. But the prior two months of job growth were revised lower by a cumulative 29,000. Besides, the ISM’s September reading on the services sector also topped expectations, coming in at 55.1% versus 53.7% in August, with the latest level the best since March. US businesses that provide services such as banking and health care grew at a faster rate in September. The Institute for Supply Management stated that its service index climbed to 55.1% in September, the best reading in six months. September also marked the 33rd straight month of expansion.

In Europe, European Central Bank president Mario Draghi is waiting for Spain to get back to him on whether his plan to save the euro is needed. Besides, the European Union’s top banking regulator told the bloc’s lenders to hold on to more than 200 billion euros ($258 billion) in capital raised to pave the way for tougher global standards. On the economic front, the latest private survey on business activity and new orders for three months ending in September showed a decline.  The Purchasing managers’ index was revised higher to 46.1 from its previous estimate of 45.9. Any value below 50 indicates a decline in activities. The composite index for the euro zone was below 50 for the eighth month in a row and activities fell sharply in France and in Germany were nearly unchanged. The latest reading offered yet another evidence of the recessionary trend in the region.

The Dow Jones Industrial Average gained 12.25 points, or 0.09 percent, to close at 13,494.60, the S&P 500 finished up by 5.24 points, or 0.36 percent at 1450.99, while the Nasdaq ended higher by 15.19 points, or 0.49 percent to settle at 3135.23.

Indian ADRs closed mostly in green on Wednesday, Dr. Reddy’s Lab was up 0.80%, Tata Communications was up 0.36% and Tata Motors was up by 0.34%. On the other hand, ICICI Bank was down by 0.04% and HDFC Bank was down 0.01%.