US markets close mostly lower on European worries

The US markets closed mostly lower on Wednesday, with the S&P 500 index stalling just points from its record close, as investors continue to monitor the situation in Cyprus, the Cyprus government is restricting money transfers as it readies for Thursday’s planned reopening of its banks. On the economy front the National Association of Realtors reported that pending sales of homes declined 0.4% in February, while longer-term trends showed continuing growth. The pending-home-sales index decreased to 104.8 in February from 105.2 in January, but was up more than 8% from 96.6 in February 2012.

Some of the Federal Reserve’s leading policy doves - Boston Fed President Eric Rosengren, Cleveland Fed President Sandra Pianalto, Minneapolis Fed President Narayana Kocherlakota and Chicago Fed President Charles Evans spoke in regards of bond-buying program. Rosengren stated that the Fed’s $85-billion-a-month asset purchase program is having the desired impact of speeding up the pace the recovery and should be continued through the end of the year. Kocherlakota reiterated his proposal for the central bank to pledge to keep rates low so long as the unemployment rates remains above 5.5%, rather than the 6.5% target currently in use. Charles Evans, the president of the Chicago Federal Reserve Bank, and a leading architect of the Fed’s ultra-loose policy, counseled a go-slow approach to making any changes to the $85-billion-a-month per month purchases of Treasurys and mortgage-backed securities. Pianalto, however, added that economic conditions could emerge before long that would let the Fed slow the pace of its asset purchases. Rosengren and Evans are voting members of the rate-setting Federal Open Market Committee in 2013. Evans has emerged as an important Fed figure after successfully pushing the central bank to adopt economic thresholds for the first rate hike in order to ensure that investors don’t fear a quick tightening of monetary policy once the economy improves

In Europe, the Cyprus government is restricting money transfers as it readies for Thursday’s planned reopening of its banks, which have been closed for nearly two weeks as the island nation struggled to reach a deal to avert a meltdown of its financial system. The island nation agreed early Monday to raise billions of euros from big depositors at the Bank of Cyprus and Popular Bank of Cyprus, and to shrink its banking sector in return for a €10 billion European Union bailout. Meanwhile, two reports from the European Union highlighted the gloomy economic and business outlook in Europe. The EU business climate indicator fell 0.14 points in March, extending a downturn that goes back to Sept. 2011. A separate survey showed that economic sentiment in Europe fell in March, while consumer confidence was little changed.

The Dow Jones Industrial Average lost 33.49 points or 0.23 percent to 14,526.20, the S&P 500 slipped 0.92 points or 0.06 percent to 1,562.85, while the Nasdaq added 4.04 points or 0.12 percent to 3,256.52.

The Indian ADRs closed mostly in red on Wednesday, Dr. Reddy’s Lab was down 0.22%, Wipro was down 0.13% and Tata Motors was down 0.09%. On the other hand, ICICI Bank was up 0.60% and Infosys was up 0.10%.