3:40 PM New York – U.S. revised its third quarter economic growth estimate to 4.1%, the strongest increase in nearly two years but underlying rate of growth remained at 2.5%. Global markets surged and extended yearly gains and the dollar strengthened.
Stocks in New York traded sharply higher after the government revised the third quarter estimate higher.
U.S. Commerce Department showed that the U.S. economy expanded at faster than previously estimated rate of 4.1% in the third quarter.
The economy was estimated to grow at 3.6% and the latest revision was based on “more complete source data” tracked by the U.S. agency. The Commerce Department said higher than expected exports, consumer spending and rising home values and investment in factories and a rise in inventories.
Consumers stepped up spending in the quarter by 2% from the previous estimate of 1.4% and increased spending on homes, cars and healthcare and businesses added more staff.
The second quarter economic growth was estimated at an annual rate 2.5%.
S&P 500 index increased 0.6% to 16,268.73 and the Nasdaq Composite index gained 1.3% to 4,108.92.
Markets in Europe also extended gains after the release of the U.S. estimate.
FTSE 100 index gained 0.3% to 6,607, DAX index advanced 0.7% to 9,400 and the CAC 40 index increased 0.4% to 4,194.
Indexes in Asia generally closed higher.
Nikkei extended its gain by 1.2% and closed up 3.3% in the week and market indexes in India also advanced 1.8%. Australian indexes also added 1.2% and extended weekly gain by more than 3%.
However, indexes in Hong Kong declined 0.3% and in Shanghai dropped 2% and in Thailand eased 0.3%.
U.S. Stocks in Review
BlackBerry Ltd (BBY
) soared 13% after the smartphone maker agreed to a five-year deal with Foxcon Group to build its gadgets.
Fastenal Co (FAST
) declined 5% after the retailer of fasteners said quarterly earnings are likely to be lower than estimated on slower sales increase.
Jazz Pharmaceuticals Inc added 7% after the maker of narcolepsy treatment Xyrem offered to acquire Gentium SpA for $1 billion.
Red Hat Inc (RHT
) soared 16% after the software developer estimated adjusted fiscal earnings in 2014 between $1.46 and $1.48 a share, higher than its previous estimate between $1.36 and $1.38.
Responsys surged 37% after the largest seller of business productivity software developer offered to acquire the company for $27 a share.