Scoreboard: US growth spurt

Wall Street rose on strong corporate earnings and positive GDP data, while European markets edged up and oil prices slid.

In the US, GDP rose at a 3.5 per cent annual pace in the September quarter (consensus 3 per cent). A narrower trade deficit and a surge in defence spending were the main drivers of the upbeat result. Consumer spending was also a healthy contributor, while inventories was one of the few drags on the strong result. US jobless claims rose by 3,000 to 287,000 in the last week.

European shares rose in a choppy trading session on Thursday, supported by upbeat earnings results. Renault gained 2.9 per cent after the automaker posted a rise in third-quarter revenue and upgraded its full year forecasts. The FTSEurofirst 300 index rose by 0.6 per cent with the UK FTSE up by 0.2 per cent and the German Dax lifted by 0.4 per cent. Australia's major miners were weaker in London trade, with shares in BHP Billiton down by 0.9 per cent while Rio Tinto lost 1.3 per cent.

US sharemarkets rallied on Thursday, boosted by upbeat earnings and a stronger-than-expected GDP read. The Dow's largest component, Visa, jumped 11 per cent after topping earnings estimates and saying the mobile payment industry would be a great driver for business. MasterCard also reported strong results, with its shares up 9 per cent. According to Thomson Reuters, 75.5 per cent of the S&P 500 companies that have reported results have exceeded profit expectations - above the longer-term average of 63 per cent. At the close, the Dow Jones was higher by 221 points or 1.3 per cent with the S&P 500 index higher by 0.6 per cent while the Nasdaq rose by almost 17 points or 0.4 per cent. 

US treasuries rose on Thursday (yields lower) as worries about deflation in the euro zone prompted investors to seek safety in government debt. US two-year yields were down by 2 points to 0.477 per cent while US 10-year yields fell 1 point to 2.309 per cent.

The US dollar drifted lower against major currencies on Thursday. The Euro rose from lows near $US1.2555 to highs near $US1.2630 and held near $US1.2610 at the close of US trade. The Aussie dollar rose from lows near US87.55c to highs near US88.40c ending US trade near US88.25c. And the Japanese yen held between 108.80 yen per US dollar and ¥109.40, closing US trade around  ¥109.25.

World oil prices fell on Thursday, as traders bet that OPEC will not cut output significantly at their meeting next month. On Wednesday OPEC's secretary general Badri said OPEC was unlikely to shift production for 2015. Brent crude fell by US88c or 1 per cent to $US86.24 a barrel while the US Nymex crude price fell by $US1.08 or 1.3 per cent to $US81.12 a barrel.

Base metal prices were mixed on the London Metal Exchange on Thursday. Nickel managed to eke out a 0.7 per cent gain. While lead fell 1.7 per cent and copper lost 1.2 per cent. Gold fell sharply on Thursday, continuing to react to the more upbeat view from the US Fed. The Comex gold futures quote lost $US26.30 an ounce to $US1,198.60. Iron ore was up by US40c on Thursday or 0.5 per cent to $US79 a tonne.

Ahead: In Australia, producer prices (September quarter) and private sector credit are released. ANZ releases full year profit figures, Macquarie releases half-year profit and Origin releases quarterly production. In the US, no economic data is expected.

Savanth Sebastian is an economist with Commsec.

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