Shares gain on strong U.S. GDP data; oil rises
By Sam Forgione
NEW YORK (Reuters) - U.S. and European shares rose on Tuesday, with the Dow industrials ending above 18,000 for the first time after an unexpectedly strong report on U.S. economic growth supported risk appetite and lifted oil prices.
Both the Dow and the S&P 500 hit record closing highs after the Commerce Department said the final estimate of U.S. gross domestic product for the third quarter was revised up to a 5 percent annual pace, its quickest in 11 years, from 3.9 percent reported last month. Stronger consumer and business spending fueled the surge.
The data reassured investors that the U.S. economic expansion could buoy the global economy and that recent declines in oil prices were a boon for consumers. The data also boosted oil prices by supporting expectations of greater demand for crude.
The gains in U.S. shares pushed the Dow over 18,000 for the first time in its history. The index rose as high as 18,069.22 and is up about 175 percent from a 12-year closing low hit on March 9, 2009. The S&P's record close was its 51st such record this year.
"The GDP data just further emboldened investor confidence to buy stocks in the near term," said Michael Cuggino, president and portfolio manager at Permanent Portfolio Family of Funds in San Francisco.
Other data showed U.S. consumer sentiment jumped in December to its highest level in nearly eight years on cheaper gasoline and better job and wage prospects.
The data strengthened the U.S. dollar, which hit its highest level against a basket of major currencies in over 8 years, while the euro plumbed 28-month lows against the greenback.
The U.S. data combined with positive economic news from Spain and Portugal to push European equities higher. A fall in Greek stocks limited gains in European shares, however, on the prospect of early elections that could put Greece's rescue package at risk. Continued...