Markets surge on US growth and euro plan

Julian Harris
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AMERICA’S economy grew at its fastest pace in a year, official data for the three months to September claimed yesterday.

Stocks surged as the bell rang on Wall Street, after the government’s figures estimated annual GDP expansion of 2.5 per cent in the third quarter.

The Dow Jones industrial average soared by over 258 points in the opening moments, a spike of 2.18 per cent – eventually ending the day up 2.86 per cent at 12,208.48 points.

Equities were also relieved by statements from European leaders, who sought to assure markets that a remedy to the debt crisis was in motion.

The S&P 500 is up more than 13 per cent this month, on pace for its biggest monthly gain since October 1974.

Wall Street’s “fear gauge”, the CBOE Volatility Index, fell 15 per cent.

On this side of the pond, stocks were also boosted by the relatively bullish news. The Euro Stoxx 50 climbed over six per cent during the day.

Safe haven spot gold slipped $2.50 to $1,721.20 an ounce, while ICE Brent December crude rose $3.26 to $112.17 a barrel, as oil received a boost.

The pound rose against the dollar yet was outperformed by the euro, which nearly reached $1.42 at one stage.