* World equities rally after Q3 U.S. GDP expanded 3.5 pct
* U.S. economy grows for first time in more than a year
* Dollar, Treasuries down; oil rises above $80 a barrel
(Updates with U.S. markets activity, adds byline, changes
dateline; previous LONDON)
By Jennifer Ablan
NEW YORK, Oct 29 (Reuters) - World stocks recovered from
three-week lows on Thursday after U.S. gross domestic product
data showed the world's biggest economy returned to growth last
quarter following the worst recession in seven decades.
The data, showing annualized growth of 3.5 percent in the
third quarter, compared with a forecast for 3.3 percent. Some
strategists and traders were surprised as they had been
downgrading their outlook after disappointing data in recent
days. For details, see [].
"The market was beginning to price in a weaker outlook, but
today's GDP report was good across the entire spectrum," said
John Spinello, chief Treasury strategist at Jefferies & Co in
New York.
For their part, top investors around the world rebuilt
equity holdings during a shaky October for stock markets on the
view that the economy would not fall back into recession given
accommodative central bank policies. [].
The MSCI world index <.MIWD00000PUS> turned positive after
the data, rebounding from three-week lows on Wednesday, the
index's biggest one-day selloff since August. After 1 p.m., the
index was up about 1.40 percent.
U.S. equities also rallied. The Dow Jones industrial
average <> was up 151.07 points, or 1.55 percent, at
9,913.76, while the Standard & Poor's 500 Index <.SPX> was up
18.00 points, or 1.73 percent, at 1,060.63. The Nasdaq
Composite Index <> was up 33.47 points, or 1.63 percent,
at 2,093.08.
In Europe, the FTSEurofirst 300 index <> jumped 1.77
percent, having fallen around 0.2 percent earlier.
Emerging stocks <.MSCIEF>, which had suffered heavily from
this week's global markets shakeout and retreat from risk,
recovered from early losses to trade up 0.52 percent
In energy and commodities prices, U.S. light sweet crude
oil <CLc1> rose $2.75, or 3.55 percent, to $80.21 per barrel,
while spot gold prices <XAU=> rose $17.75, or 1.73 percent, to
$1044.60.
The Reuters/Jefferies CRB Index <.CRB> was up 6.11 points,
or 2.26 percent, at 276.50.
BONDS VOYAGE
U.S. Treasury debt prices fell as the U.S. GDP figures
suggested the economy would emerge from recession faster and as
stocks advanced.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 24/32, with the yield at 3.503 percent, while the 2-year
U.S. Treasury note <US2YT=RR> was down 4/32, with the yield at
0.996 percent.
At the longer end of the yield curve, the 30-year U.S.
Treasury bond <US30YT=RR> was down 47/32, with the yield at
4.3445 percent.
In addition, the dollar was down against a basket of major
trading-partner currencies, with the U.S. Dollar Index <.DXY>
down 0.67 percent at 75.915 from a previous session close of
76.425.
The euro <EUR=> was up 0.88 percent at $1.4838 from a
previous session close of $1.4709. Against the Japanese yen,
the dollar <JPY=> was up 0.84 percent at 91.38 from a previous
session close of 90.620.
(Additional reporting by Natsuko Waki; Editing by Kenneth
Barry)
