(RTTNews) - The European markets rose for the third day on Thursday after a report showed that the U.S economy expanded more than previously estimated last quarter and a drop in crude oil prices lifted investor sentiments.

The U.S. Commerce Department said in its report that gross domestic product increased at an annual rate of 3.3% in the second quarter compared to the advance estimate of 1.9% growth. Economists had been expecting GDP growth for the quarter to be revised up to 2.7%.

Separately, the Labor Department said in a report that initial jobless claims fell to 425,000 from the previous week’s revised figure of 435,000. Economists had expected jobless claims to fall to 425,000 from the 432,000 originally reported for the previous week.

Back in Europe, a report released by the Nationwide Building Society revealed that UK house prices in August showed the largest annual decline in 18 years, as concerns over economic downturn as well as lower mortgage lending hurt the housing market.

Crude for October delivery fell $1.11 to $117.05 a barrel on the New York Mercantile Exchange, by the time the European markets closed. The contract hit as high as $120.50 earlier in the session amid concerns Tropical Storm Gustav could cause problems in the Gulf of Mexico’s oil region, but eased later as traders bet the U.S. government would tap the Strategic Petroleum Reserve if Gustav disrupts production.

The FTSEurofirst 300 index of pan-European blue chips closed 1.4% higher at 1.190.55 points, while the narrower DJ Stoxx 50 index rose 1.5% to 2,911.52 points.

Around Europe, the U.K.’s FTSE 100 index rose 1.32% to 5,601.20, while France’s CAC 40 index climbed 2.02% to 4,461.49 and Germany’s DAX index surged up 1.57% to 6,420.54.

Banking stocks were among the top gainers, as upbeat U.S. GDP and jobless claims data sparked optimism about the world’s largest economy. BNP Paribas, France’s largest bank, climbed 5.1%, while Societe Generale, the second largest, rose 4.1% and Credit Agricole, the third largest, jumped 8.9%. UBS, Switzerland’s largest bank, gained 4.6% and Barclays, Britain’s third biggest lender, rallied 5.8%.

Shares of European companies that generate a substantial portion of their sales in the U.S. also rose after the release of the U.S. GDP data. CRH, the world’s second biggest maker and distributor of building materials, surged up 4.9%, while Saint Gobain, the world’s biggest glass maker, added 3.3.8% and Siemens, Germany’s biggest engineering company, rose 2.2%.

Oil sensitive airline stocks advanced after crude oil prices retreated. Air France-KLM, Europe’s largest airline, climbed 2.3%, while Lufthansa, the second largest, rose 1.7% and British Airways, the third largest, surged up 2%.

On the other hand, French bank Natixis fell 3.9% after the bank reported a net loss of 1.02 billion euros for the second quarter.

Dutch retailer Royal Ahold slipped 4% after the company said second-quarter operating profit dropped 14% from a year ago, missing analysts’ estimate.

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Posted in Categories: Eurozone, Releases, Stocks, Switzerland, UK, USA.

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