GDP growth pushes US stocks to new records

Analysts say US investors have been cheered by an increase in the third-quarter GDP growth estimate.

US stocks have closed at new records after the Commerce Department reported third-quarter GDP grew much faster than previously estimated.

At the closing bell, the Dow Jones Industrial Average advanced 60.75 points (0.38 per cent) to 16,239.83, a new record.

The S&P 500 rose 9.86 (0.54 per cent), also a new record, while the tech-rich Nasdaq Composite Index added 46.61 (1.15 per cent) to close at 4,104.74.

Analysts said investors were cheered after the Commerce Department raised its estimate for third-quarter gross domestic product growth to an annual rate of 4.1 per cent, from 3.6 per cent.

Scott Wren, senior equity analyst, said the GDP growth suggested solid growth, but it was not so strong that it would undermine the Federal Reserve's strategy of keeping interest rates low and tapering its bond-purchase program.

"We're still in this modest-growth, modest-inflation economy," Wren said.


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Source: AAP


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