US growth welcomed by markets

LONDON - The Associated Press

AFP photo

Better-than-expected U.S. economic growth figures helped turnaround the mood in financial markets on Oct. 26.

The downbeat mood carried over into Europe, but improved when government figures showed the U.S. economy grew by annualized rate of 2 percent in the third quarter. That was slightly better than predictions for a 1.8 percent rise and eased some of the concerns that continue to hang over the world’s largest economy.

“Strength in consumer spending remains an encouraging feature to today’s report into the final quarter,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. “As they say, never write off the consumer.”

The figures were enough to prompt a sea-change in Europe. Germany’s DAX was 0.4 percent higher at 7,235 while the CAC-40 in France rose 0.6 percent to 3,431. The FTSE 100 index of leading British shares was steady at 5,807. All three indexes had been sharply lower earlier.

Wall Street was poised for a steady opening - in contrast to earlier expectations for sizeable falls on both the Dow and the broader S&P 500 index.

The U.S. is likely to remain the main focus in the markets at least until the presidential election. Though polls suggest President Barack Obama has an advantage in the electoral college over his challenger Mitt Romney, the margins are tight.