The US markets closed mostly higher on Wednesday, while the Dow fell for a fifth straight session as the broader market staged a modest rebound on the back of technology stocks. The selloff came as issues with the Republicans’ health-care bill prompted investors to question Trump’s ability to follow through on promises of tax reforms and $1 trillion in infrastructure spending. A terrorist attack in the UK has not affected US stocks for the moment.
On the economy front, sales of previously owned homes tumbled in February as the housing market remained choked by tight inventory. Existing-home sales were at a 5.48 million seasonally adjusted annual rate last month. That was down 3.7% compared with January’s sales pace, which was the strongest in a decade. Sales in February were still 5.4% higher compared with a year ago, but the supply situation has worsened. Inventory was 6.4% lower than in February 2016. The median home price rose 7.7% compared with a year ago to $228,400. At the current pace of sales, it would take 3.8 months to exhaust available homes for sale, the lowest in any February back to 1999. Sales increased in only one region in February. They rose 1.3% in the South. The regional declines ranged from a 13.8% tumble in the Northeast to a 3.1% decline in the West. In the Midwest, sales were down 7.0%.
Meanwhile, Dallas Federal Reserve Bank President Robert Kaplan said that with the US workforce nearly fully employed and inflation heading toward 2 percent, the Federal Reserve should raise interest rates two more times this year and continue work on a plan to gradually trim its massive balance sheet. Kaplan added that we are still accommodative and it’s very appropriate for us to be accommodative. If inflation rises above the Fed’s 2-percent target for a brief period, it is not going trigger faster rate hikes as long as it is not a persistent trend. Though the current rate of US unemployment, at 4.7 percent, is below the level historically thought to be consistent with full employment, Kaplan enlightened that he does not believe it will generate undue upward pressure on prices. Kaplan also said he is mindful that some of the policies expected under President Donald Trump’s new administration, including changes to immigration and trade policies and changes to health insurance, could slow economic growth or hurt consumer spending.
The Nasdaq was up 27.81 points or 0.48 percent to 5,821.64, S&P 500 gained 4.43 points or 0.19 percent to 2,348.45, while the Dow Jones Industrial Average lost 6.71 points or 0.13 percent to 20,661.30.
The Indian ADRs closed mostly in green; Tata Motors was up 1.12%, HDFC Bank was up 0.55% and Infosys was up 0.25%. On the other hand, Dr. Reddy’s Lab was down 4.03% and ICICI Bank was down 0.13%.