The US markets closed higher on Wednesday, for the fifth session in a row, marking the longest record-setting streak for all three benchmarks since January 1992, as President Donald Trump promised a massive tax plan in the not-too-distant future. Trump's latest comments echo his pledge last week to deliver a phenomenal tax plan that would be revealed soon. Meanwhile, Federal Reserve Chairwoman Janet Yellen appeared to reinforce the market's optimism when she testified in front of the Senate Banking Committee that investors are expecting a more growth-supportive fiscal policy and a boost corporate earnings. On Tuesday, she had hinted that the central bank could resume a gradual raise interest rates as soon as to it is next to policy meeting in March. Higher rates have usually deflated the market's zest for stocks, which have benefited from the low-rate environment, but Yellen's upbeat assessment of the economy along with Trump's promises of business-friendly policies, tax cuts and deregulation of the banking sector, has bolstered investor confidence.
On the economy front, most US retailers posted strong sales in January, even beleaguered department stores, perhaps a sign that higher consumer confidence since the election has encouraged Americans to spend more for now. Retail sales rose 0.4% last month following a much bigger gain in December than originally reported. Every major retail sector reported higher sales except for auto dealers, whose business tends to tail off after the Christmas shopping season. Auto purchases account for about one-fifth of all retail spending. The Empire State index of manufacturing conditions in the New York area jumped to its highest level in more than two years in February. The index rose to 18.7 in February from 6.5 in January. That's well above forecasts of a reading of 7.5. The details of the report were also strong. The new orders index climbed to 13.5 in February from 3.1 in the prior month. Shipments rose to 18.2 from 7.3 in January. The unfilled orders index rose above zero for the first time in more than five years.
Meanwhile, the prices Americans pay for goods and services surged in January by the largest amount in four years, mostly reflecting a rebound in the cost of gasoline that's taking a bigger chunk out of household incomes. The consumer price index, or cost of living, rose by a seasonally adjusted 0.6% in January. The rising cost of gasoline is pinching US households and pushing inflation higher after several years of little price pressures, a trend that could also spawn higher interest rates in the near future. Over the past year the consumer price index has climbed 2.5%, the biggest increase in a 12-month span in five years.
The Dow Jones Industrial Average added 107.45 points or 0.52 percent to 20,611.86, the Nasdaq was up 36.87 points or 0.64 percent to 5,819.44, while S&P 500 gained 11.67 points or 0.50 percent to 2,349.25.
The Indian ADRs closed mixed; HDFC Bank was up 0.18%, Dr. Reddy's Lab was up 0.14% and Wipro was up 0.06%. On the other hand, Tata Motors was down 1.02% and ICICI Bank was down 0.11%.