US markets closed mostly up; S&P at record highs

The US markets closed mostly higher on Monday, with the S&P index inching to an all-time high. There was however concerns with Japan falling into recession, while softer-than-expected manufacturing data, too weighed on sentiment capping the upside. On the economy front, the Empire State manufacturing index, the first of the many regional manufacturing gauges to be released, rebounded a bit to 10.2 in November from 6.2 in October. The index had stood at 27.5 in September, so the readings over the last two months indicate a downshift in activity. The new orders index returned to positive ground in November but unfilled orders, delivery times, and the average employee workweek remained in negative territory. On a more positive note, the index for expected general conditions index rose to 47.6, its highest level since January 2012. Industrial production fell a seasonally adjusted 0.1% in October, the second drop in the last three months. Another sign of softness came in a slight downward revision to September, to a 0.8% gain from the prior estimate of a 1.0% increase. In October, manufacturing output rose 0.2%, but mining output dropped 0.9% and utilities output fell 0.7%. Capacity utilization fell to 78.9%, below the 79.3% consensus. Meanwhile, economists trimmed their forecasts for US economic growth in the fourth quarter but slightly raised their expectations for the balance of 2014 on an improved outlook for the labor market. According to the Philadelphia Federal Reserve’s quarterly survey of 42 forecasters, analysts see the economy growing at an annual rate of 2.7% in the current quarter. In last quarter’s survey, growth for this quarter was forecast at 3.1%. The pace of hiring was expected to accelerate in the current quarter compared with previous expectations. The jobless rate was expected to be 5.9% at the end of the current quarter and 5.8% by the end of the first quarter of 2015. Inflation is expected to stay low, with year-on-year core consumer price inflation, which strips out food and energy costs, averaging 1.7% in the fourth quarter. Dow Jones Industrial Average added 13.01 points or 0.07 percent to 17,647.75, S&P 500 ended higher by 1.50 points or 0.07 percent to 2,041.32 while, Nasdaq was down by 17.54 points or 0.37 percent to 4,671.00.  The Indian ADRs closed mostly in green on Monday; Tata Motors was up 2.39%, ICICI Bank was up 0.18% and Infosys was up 0.15%. On the other hand, HDFC Bank was down by 0.23% and Wipro was down by 0.10%.