US markets gain as Fed outlines strengthening economy

03 Nov 2011 Evaluate

The US markets closed higher on Wednesday, after the Federal Reserve noted that the economy strengthened in the third quarter,while an industry report found better-than-expected jobs growth in October and worries about the latest upset in the European Union ebbed. In a statement released after the Federal Open Market Committee concluded a two-day meeting, the FOMC did not make any further moves to ease monetary policy. Bernanke spoke after the policy-setting Federal Open Market Committee stating that the economy picked up in third quarter and repeated its statement from September that there are significant downside risks to the outlook. The Fed also cut its economic growth outlook through 2013, as was expected. Bernanke echoed previous statements that the Fed could do more if needed, saying another round of mortgage-backed securities purchases was a viable option.

Meanwhile, the EU and International Monetary Fund stated that lenders are not willing to release Greece’s next batch of aid until after a vote is held. France and Germany told Greece that a sixth tranche of aid won’t be paid unless the country adopts proposals outlined last week to help Europe out of its sovereign-debt crisis.

The Dow Jones industrial average gained 178.08 points, or 1.53 percent, to 11,836.00. The Standard and Poor’s 500 closed higher by 19.62 points, or 1.61 percent, to 1,237.90, while the Nasdaq composite gained 33.02 points, or 1.27 percent, to 2,639.98.

The Indian ADRs closed mixed on Wednesday, Infosys Technologies was up by 1.05%, Dr. Reddy’s Lab was up by 0.76% and HDFC Bank was up by 0.67%. On the flip side, MTNL was down by 0.07% and Tata Motors was down by 0.03%.