While you were sleeping: Turkey shooting offsets GDP boost

Wall Street closed higher as a spike in oil shares offset a drop in airline shares amid concerns about rising international tensions.

News of Turkey shooting down a Russian military plane near its border with Syria and a worldwide travel warning was accompanied by fresh evidence of better-than-expected US economic growth.

After a mixed day's trading, the Dow Jones Industrial Average advanced 19.51 points, or 0.1%, to 17,812.19 at the close.

The Standard & Poor's 500 Index and the Nasdaq Composite Index also both rose 0.1% to 2089.14 and 5102.81 respectively.

"This has really gotten investors' attention," Jack Ablin, chief investment officer at BMO Private Bank in Chicago, told Reuters. "Investors are worried that tensions could escalate."

Airline stocks fell by up to 3.3% after the US issued a global travel alert for Americans because of "increased terrorist threats."

In the Dow, gains in shares of Chevron and Exxon Mobil, both up 2.4%, offset slides in Merck and United Technologies.

Energy shares in the S&P Index rose with the price of oil, which climbed on the incident between Russia and Turkey.

Benchmark Brent rose to a two-week high of $US46.50, while US crude's West Texas Intermediate futures rose 3.2% to $US43.07 a barrel.

Global oil glut
Eyes are on the December 4 Opec meeting to gauge the outlook for the global glut.

"Ultimately, we still see a drop to around $US37.75 but such a development is not expected until the market gets through the Opec meeting at the end of next week and when increasingly bearish global supply balances place additional pressure on the WTI curve," Jim Ritterbuch of Chicago-based oil consultancy Ritterbusch & Associates, told Reuters.

Meanwhile, some say US equities hold relatively more appeal.

"When you see this type of uncertainty happening, it reinforces looking at the US as a safe haven," Tom Anderson, chief investment officer at Boston Private Wealth, told Bloomberg.

"The US economy is in very solid shape. We're pretty positive on equities as a result. But there's certain to be noise and volatility around those events."

There was fresh evidence of the strength of the US economy, which also underpinned expectations the Federal Reserve might feel comfortable enough to raise interest rates next month, for the first time since 2009.

A Commerce Department report showed US gross domestic product increased at a 2.1% annual pace in the third quarter, up from the 1.5% rate estimated last month.

"This is a sturdy second GDP print for the third quarter when looking past the inventory swings," Robert Kavcic, a senior economist at BMO Capital Markets in Toronto, told Reuters. "Importantly, domestic demand in the US economy remains very solid, something that will surely give comfort to the Fed as it ponders its next move."

Separately, the S&P/Case Shiller composite index of 20 metropolitan areas jumped a larger-than-expected 5.5% in September on a year-over-year basis, up from 5.1% in the year to August.

In Europe, the Stoxx 600 Index finished the day with a 1.2% slide from the previous close. The UK's FTSE 100 Index fell 0.5%, while Germany's DAX Index sank 1.4%, as did France's CAC 40 Index.

(BusinessDesk)