US markets closed lower on late hour selling

The US market closed lower on Monday, erasing modest gains in the last 15 minutes of trading. Traders attributed recent volatility in stocks to fluctuations in the currency markets, where the surge in the dollar raised concerns over profitability of multinational corporations. On the economy front, undermined by setbacks in production, consumption and housing, a gauge of US economic activity edged lower last month. 

The Chicago Fed National Activity Index dipped to -0.11 in February from -0.10 in January. Any reading below zero indicates growth below historic trends. The three-month moving average, designed to smooth out month-to-month volatility, swooned to -0.08 from 0.26. For the monthly index, the production and consumption/housing subcategories were also below zero.

However, the price of buying and renting a home are rising, squeezing consumers and dampening the housing market. The median sales price of used homes hit $202,600 in February, up 7.5% from the year-earlier period. Potential first time buyers on the sidelines and renters are also being squeezed as rents are rising at a 3.5% rate. 

The share of first-time home buyers rose marginally to 29% from 28% in February. After falling to a nine-month low in January, overall sales of existing homes rebounded partially, rising 1.2% in February to a seasonally adjusted annual rate of 4.88 million.

Meanwhile, monetary policy still was in the spotlight, with St. Louis Federal Reserve President James Bullard stating that the dovish statement from last week may have misplaced investor expectations about the first rate hike. Bullard also added that the market could throw another tantrum with the Fed possibly raising rates later this year. 

Cleveland Fed President Loretta Mester, who isn't a voting member of the policy-setting committee this year, enlightened that the central bank can do more at helping guide the market in terms of rate moves. Fed Vice Chair Stanley Fischer notified that rate hike is likely to be warranted this year.

The Dow Jones Industrial Average lost 11.61 points or 0.06 percent to 18,116.04, Nasdaq was down by 15.45 points or 0.31 percent to 5,010.97 while, S&P 500 was lower by 3.68 points or 0.17 percent to 2,104.42. 

The Indian ADRs closed mostly in red on Monday; HDFC Bank was down 0.73%, ICICI Bank was down 0.47%, Tata Motors was down 0.18% and Infosys was down 0.12%. On the other hand, Wipro was up by 0.19%.