The US markets closed higher on Thursday, as financial shares rallied following a positive reading of economic growth and the tech-heavy Nasdaq returned to finish at record highs after a month-long wait. Cleveland Fed President Loretta Mester forecast GDP growth above 2% in 2017, and sees a sustained return to 2% inflation over the next year or so. Mester also expects the Fed to raise interest rates again this year, but didn’t say how many times might be likely. Currently, market participants anticipate three or four hikes in total over 2017. On the other hand, Dallas Fed President Rob Kaplan said that one of the biggest risks facing the economy is Washington, and that enacted policies could give consumers pause.
On the economy front, the US grew slightly faster at a 2.1% pace in the fourth quarter and corporate profits rose again, offering further evidence that the economy entered 2017 on stronger footing than it did a year earlier. Gross domestic product, the official scorecard for the economy, was revised up from 1.9% annual rate of growth owing to higher spending on gasoline and travel-related services. Consumer spending in the fourth quarter was raised to a 3.5% from 3%, largely accounting for the revision to GDP. Originally the government had estimated the gain in spending at just 2.5%.
Meanwhile, the number of Americans who applied for unemployment benefits in late March dropped by 3,000 and stood at 258,000, keeping new claims near the lowest level in decades. New jobless claims have been under the key 300,000 threshold for 108 straight weeks, the second longest stretch since the early 1970s. The four-week average of initial claims, meanwhile, rose by 7,750 to 245,250. Although it’s still quite low, that is the highest level since the end of 2016. The monthly average offers a more stable look at the short-term trend in layoffs. Continuing jobless claims, or the number of people already collecting unemployment checks, increased by 65,000 to 2.1 million. Two weeks ago these claims fell below 2 million for the first time since 2000.
The Dow Jones Industrial Average added 69.17 points or 0.33 percent to 20,728.49, the Nasdaq was up 16.79 points or 0.28 percent to 5,914.34, while S&P 500 gained 6.93 points or 0.29 percent to 2,368.06.
The Indian ADRs closed mostly in green; HDFC Bank was up 2.09%, Tata Motors was up 1.13%, Infosys was up 0.52% and Wipro was up 0.36%. On the other hand, Dr. Reddy’s Lab was down 2.78%.