US markets gain on encouraging GDP data

The US markets closed higher on Thursday, as report showed faster-than-estimated growth in gross domestic product, fueling speculation that economy is strong enough to withstand higher interest rates. The US economy grew by a 3.5% annual rate in the third quarter, fueled by a surge in exports and the biggest jump in federal spending in five years. Although growth slowed from a 4.6% pace in the spring, the economy continued to show solid if unspectacular improvement during the period stretching from July through September. Consumers spent at a moderate 1.8% pace, businesses’ invested at a steady clip and government is no longer a major drag on the economy. What’s more, the US is adding jobs at the fastest rate since the recession ended in 2009 and consumers are feeling the most confidence in seven years, buoyed by a rising stock market and falling gasoline prices. Meanwhile, applications for US unemployment benefits rose slightly in late October, but the level of jobless claims continued to point to an improving labor market in which companies are holding onto the workers they already have while slowly beefing up their staffs. Initial jobless claims climbed by 3,000 to 287,000 in the week ended October 25. Claims have been under the key 300,000 benchmark for seven straight weeks for the first time since the recession ended. The average of new claims over the past month, meanwhile, dipped by 250 and stood at 281,000. The four-week average reduces seasonal volatility in the weekly report and is seen as a more accurate barometer of labor-market trends. Dow Jones Industrial Average added 221.11 points or 1.30 percent to 17,195.42, Nasdaq was up by 16.91 points or 0.37 percent to 4,566.14, while S&P 500 ended higher by 12.35 points or 0.62 percent to 1,994.65.  The Indian ADRs closed mostly in green on Thursday; Infosys was up by 1.24%, HDFC Bank was up by 0.40%, Wipro was up 0.22% and Dr. Reddy’s Lab was up 0.21%. On the other hand, Tata Motors was down 0.10%.