US markets rose on drop in jobless claims

The US markets rose on Thursday, with the S&P 500 rebounding from its longest losing streak this year, as a larger-than-expected drop in jobless claims mostly overrode worries about a budget standoff on Capitol Hill. The Labor Department stated that the number of new applications for unemployment benefits fell by 5,000 to 305,000 in the week ended September 21. The average of new claims over the past month, which is a more reliable gauge than the volatile weekly number dropped by 7,000 and stood at 308,000. That’s the lowest level since June 2007. The US economy grew an unrevised 2.5% in the second quarter, according to the government’s third and final review of gross domestic product. While, the Commerce Department reported that companies restocked warehouse shelves less than previously reported, but state and local spending actually rose instead of falling. Exports also grew somewhat slower, at 8% compared to a prior reading of 8.6%. However, sales contracts on homes fell 1.6% in August -- a third month of declines -- led by drops in three of four US regions, data released by the National Association of Realtors showed.

Meanwhile in political development, House Speaker John Boehner stated that his party will push for a bill that will tie increasing the debt ceiling - and continue funding the government past October 1 - to more cuts in federal spending. Senate Majority Leader Harry Reid, a Nevada Democrat, added that the Senate will finish a stopgap budget bill on Saturday under the current process. Reid and other Democrats reject Republican efforts to defund President Barack Obama’s health-care law in the budget process, but the House GOP may still try to include some change. Besides, in a panel discussion in Frankfurt, Germany, Fed governor Jeremy Stein notified that policymakers needed to develop a mechanical approach to tapering its bond buying to take the guesswork out of the reduction in the pace of support for the economy. Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, stated that US central bank will face risks as it pursues its exit strategy from recent unconventional policies. Separately, Minneapolis Fed President Narayana Kocherlakota added that Fed likely needed to strengthen its support for the economy, and not pull back, or taper.

The Dow Jones Industrial Average added 55.04 points or 0.36 percent to 15,328.30, the S&P 500 gained 5.90 points or 0.35 percent to 1,698.67, while the Nasdaq was up 26.33 points or 0.70 percent to 3,787.43.

Indian ADRs closed mostly in green on Thursday; ICICI Bank was up by 0.41%, HDFC Bank was up 0.27%, Wipro was up 0.27% and Tata Motors was up 0.05%. On the other hand, Infosys was down 0.15%.