US markets closed lower as jobs boost fades ahead of earnings season

The US markets closed mostly lower on Friday, but posted weekly gains, as enthusiasm over a drop in the US unemployment rate faded with the caution ahead of the beginning of the quarterly earnings season. Investors are eyeing the third-quarter earnings season which is scheduled to begin from Tuesday when aluminum giant Alcoa Inc. will report results. Meanwhile, the report on the jobs front was good but not good enough to make investors forget that the economy is still growing at a sluggish pace and a cloudy outlook for the global economy remained a significant drag on the market. The data showed that economy added 114,000 jobs in September, and the unemployment rate fell to 7.8%, its lowest level since January 2009. The Labor Department also revised employment figures for August and July to show somewhat faster job growth in late summer, mostly because of government hiring. The US created 114,000 new jobs in September and, in a potential jolt to the election, the unemployment rate fell below 8% for the first time since President Barack Obama took office.

Meanwhile, the federal government logged a $1.1 trillion deficit in fiscal year 2012 - marking the fourth straight year of trillion-dollar shortfalls. As a share of the economy, the deficit fell to roughly 7%, according to Congressional Budget Office estimates release. Deficits as a share of GDP in the past four years have been the highest since 1947. Also, Americans boosted their borrowing in August by the largest amount in three months with strong gains in the category that covers auto and student loans and in credit card debt. The Federal Reserve stated that total consumer borrowing increased $18.1 billion in August compared to July. In July, consumer borrowing had fallen for the first time in nearly a year.

In Europe, German Chancellor Angela Merkel will travel to Athens for the first time since Europe’s financial crisis broke out there three years ago, a sign she’s seeking to silence the debate on pushing Greece out of the euro. Merkel’s visit to the Greek capital on October 9 to meet with Prime Minister Antonis Samaras underscores the shift in her stance since she held out the prospect last year of Greece exiting the currency bloc. Besides, Prime Minister Rajoy stated that Spain hasn’t taken a decision on whether to seek a bailout and any decision will be based on Spaniards’ best interests. Separately, French President Francois Hollande and Italian Prime Minister Mario Monti are pressing countries including Germany and Finland to drop resistance to the European Union’s plan to implement common banking supervision on January 1.

The Dow Jones Industrial Average gained 34.79 points, or 0.26 percent, to close at 13,610.20, the S&P 500 finished down by 0.47 points, or 0.03 percent at 1460.93, while the Nasdaq ended lower by 13.27 points, or 0.42 percent to settle at 3136.19.

Indian ADRs closed mostly in red on Friday, Infosys was down by 0.90%, Dr. Reddy’s Lab was down 0.67%, ICICI Bank was down by 0.55% and HDFC Bank was down 0.50%. On the other hand, Tata Motors was up by 0.12%.