US recession ends, pushing Dow stocks up 200 points

Stocks on Wall Street rallied sharply after the US economy showed a return to growth, giving the blue chip index its biggest one-day gain in three months. 

The government's first estimate on third-quarter gross domestic product rose at a seasonally adjusted 3.5% annual rate in July through September. This compared with consensus predictions of a 3.2% rise.

The growth was driven by consumer spending, which rose 3.4% in the third quarter.

In reaction, the Dow Jones Industrial Average posted a 199.89-point gain, or 2.0%. to 9962, ending a run of three triple-digit losses in four sessions.

Gains for the blue-chip index were led by Alcoa, Caterpillar and Procter & Gamble. Alcoa surged 8.6% and Caterpillar gained 4.3%, wiping out their Wednesday drops.

P&G climbed 4.2% as its fiscal first-quarter earnings exceeded its forecasts and the consumer-products giant boosted its sales forecast for the year.

The S&P 500 surged 2.2% to 1066.11, its biggest one-day gain since July 23, while the Nasdaq Composite snapped a four-day losing streak with a 1.8% rise to 2097.55, its biggest rise in a month.

Canadian stocks rose for the first time in five days on the US GDP rise and Barrick Gold reporting earnings that topped analysts’ estimates.

Barrick gained 4.4%. Suncor Energy added 2% as crude oil surged on the economic report. Agnico-Eagle Mines, Canada’s fourth-largest bullion- mining company by market value, fell 6.5% after reporting profit lower than analysts estimated.

The S&P/TSX Composite Index jumped 269.89 points, or 2.5% to 11,075, the biggest gain in three weeks.

European markets ended higher , as investors welcomed data showing that the U.S. economy returned to growth in the third quarter.

Miners led the gains, with Xstrata shares up 7.4% while Antofagasta advanced 4.3%. Insurance firms and banks also rose. KBC jumped 17.3%, helped by an upgrade, while ING shares climbed 7.4%.

After a wobbly start, the pan-European Dow Jones Stoxx 600 Index rose 1.8% to finish at 241.73.

The U.K. FTSE 100 Index rose 1.1% to close at 5137.72, the German DAX gained 1.7% to settle at 5587.45 and the French CAC-40 Index climbed 1.4% to end at 3714.02.

Commodities: Oil, gold up

Crude futures are back above $US80 a barrel as the US economy’s growth raised hopes for higher oil demand down the line.

Light, sweet crude for December delivery recently traded $US2.70, or 3.5%, higher at $US80.16 a barrel in New York. Brent crude on the ICE futures exchange traded $US2.44, or 3.2%, higher at $US78.30 a barrel.

Gold futures have risen. December gold was up $US7.20 at $US1037.70 in New York.

Currencies: Euro up; yen, dollar down

The euro was stronger against the dollar and the yen, which both fell the most in seven weeks. The euro was at $US1.4817, from $US1.4705 on Wednesday,

The dollar was at ¥91.35, from ¥90.82, while the euro was at ¥135.34, from ¥133.55. The UK pound was at $US1.6594, from $US1.6370. The dollar was at 1.0200 Swiss francs, from 1.0272 Swiss francs.

The commodity-backed Australian, New Zealand and Canadian dollars bounced strongly off the three-week lows they hit on Wednesday.