The US markets edged higher on Monday, ending at their highest in three months, as better-than-anticipated corporate earnings heartened sentiment and on diminishing concern about Europe's debt troubles. Besides investors expectations for more stimulus from the Federal Reserve also supported markets. Many investors are betting that Fed Chairman Ben Bernanke will lay the groundwork for further action in a speech at the central bank's annual conference in Jackson Hole, Wyo., at the end of the month. Cognizant Technology Solutions Corporation, the provider of consulting and outsourcing services reported earnings and sales that topped estimates. Best Buy Company rallied after founder and former chairman Richard Schulze offered to acquire the electronics retailer for as much as $8.8 billion. However, some of the enthusiasm in the market, which extended last week's gains, waned in the last hour of trading, with the major indices closing off their intraday highs.
In Europe, German Chancellor Angela Merkel's government backed the European Central Bank's bond-buying plan. The sentiments bolstered on expectations that policy makers will take action to contain the euro-zone debt crisis by bringing down borrowing costs for Spain and Italy. Investors' reassessed comments by ECB President Mario Draghi where the ECB chief laid out a plan that could see the bank intervene to help bring down borrowing costs for countries such as Spain and Italy, but only after they request help from the region's rescue funds. Meanwhile, Greek leader and troika negotiators concluded a week long assessment of the country's progress in meeting the bailout terms. Greek government agreed to stay on track to save â‚¬3 billion in 2012 and additional â‚¬10 billion in 2013 and 2014. Separately, Spanish Prime Minister Mariano Rajoy appears to be preparing to ask for a larger bailout from the European Union as the nation struggles with rising debt yields. In the economic related, the EU productivity declined for the fourth month running in July. The seasonally adjusted EU Productivity PMI registered 48.6 in July, up from 48.3 in June. Also, the euro zone investor confidence declined for the fifth straight month in August, data released by think tank Sentix showed.
The Dow Jones industrial average gained 21.34 points, or 0.16 percent, to 13,117.50. The S&P 500 Index gained 3.24 points, or 0.23 percent, to 1,394.23, while the Nasdaq Composite was up by 22.01 points, or 0.74 percent, to 2,989.91.
The Indian ADRs closed mixed on Monday, Infosys was up 0.62%, Tata Motors was up 0.55% and ICICI Bank was up 0.40%. On the other hand, HDFC Bank was down 0.12% and Dr. Reddy's Lab was down 0.09%.