The US markets edged higher on Thursday, sending the Standard & Poor's 500 Index to the highest level in four months, as gains in the tech sector and reassuring comments from German Chancellor Angela Merkel countered disappointing regional manufacturing data. Cisco, the network-equipment maker reported better-than-expected first-quarter results and unveiled a plan to raise its quarterly dividend by 75%. Earlier in the session, stocks retreated to intraday lows after the Philadelphia Federal Reserve stated its manufacturing index was negative for the fourth straight month, with a reading that fell short of forecasts. The Philadelphia Fed's manufacturing index stayed in negative territory in August, coming in at negative 7.1 vs. negative 12.9 in July, which marks the fourth consecutive negative reading. Also, Building permits in July rose to their highest rate since August 2008, even though housing starts retreated. After hitting the highest level of activity seen in nearly four years in the prior month, construction of new houses retreated in July.
Meanwhile, US jobless claims came out slightly higher from last week. First-time applications for unemployment benefits rose slightly last week , but the rate of applications submitted stayed at the low end of its recent range. As a result, the four-week average dropped to its lowest level since the week ended March 31. This measure smoothens out the data to minimize the impact of one-time changes due to weather, strikes or holidays. The number of people putting in their initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 366,000 in the week ended Aug. 11.
In Europe, Germany's Merkel stated during a trip to Canada that Europe's largest economy was committed to maintaining the euro. Merkel voiced out that the European Central Bank's insistence on conditionality in return for help to lower borrowing costs in indebted countries matches Germany's priorities to end the crisis in the euro region. Besides, Spain will apply for aid at a meeting of finance ministers and central bank governors next month, allowing the ECB to buy Spanish government debt in the secondary market once approval is won. In economic news, Euro zone annual inflation remained stable at 2.4% in July, final data from Eurostat showed. A year earlier the rate was 2.6% in July and on a monthly basis, consumer prices fell 0.5% in the month. Separately, the UK retail sales grew 0.3% from a month ago in July after rising 0.8% in June, data from the Office for National Statistics showed.
The Dow Jones industrial average gained 85.33 points, or 0.65 percent, to 13,250.10. The S&P 500 Index gained 9.98 points, or 0.71 percent, to 1,415.51, while the Nasdaq Composite was up by 31.46 points, or 1.04 percent, to 3,062.39.
The Indian ADRs closed mixed on Thursday, Infosys was up 0.70%, Dr. Reddy's Lab was up 0.42% and Tata Motors was up 0.40%. On the other hand, ICICI Bank was down 0.31% and Sterlite Industries was down 0.07%.