U.S. GDP revision, higher oil boost stocks

Thu Mar 30, 2017 4:47pm EDT
 
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By Rodrigo Campos

NEW YORK (Reuters) - Equities in world markets edged higher on Thursday, led by gains on Wall Street after an upward revision to U.S. economic growth, while U.S. crude oil rose to trade above $50 per barrel for the first time in three weeks.

The euro slipped after data showed easing inflation in Spain and Germany, pushing back bets on tighter policy from the European Central Bank.

Oil prices rose after Kuwait gave its backing to extend OPEC production cuts in an attempt to reduce global oversupply.

"There is a significant chance that a short-to-medium-term bottom has been found," said Tamas Varga, analyst at London brokerage PVM Oil Associates.

U.S. crude CLc1 last rose 1.8 percent to $50.39 a barrel and Brent LCOc1 traded at $52.97, up 1.1 percent on the day.

Banks and energy led U.S. stocks higher as oil prices rose and U.S. gross domestic product annualized growth was revised up to a 2.1 percent rate from 1.9 percent. Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, was also revised upward.

Much of the move in U.S. stocks, which drove them to record highs earlier this month, is predicated on U.S. President Donald Trump's commitment to return to 4 percent economic growth.

Failure last week to pass a major campaign promise to revamp U.S. healthcare called into question Trump's ability to deliver tax reform, even though his party controls the two chambers of Congress. But economic fundamentals give investors some confidence.   Continued...

 
A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 30, 2017. REUTERS/Brendan McDermid