Surging US third-quarter growth buoyed stocks and weakened demand for bonds yesterday but investors generally took in their stride hefty evidence of a global economic rebound.

The dollar held most of its Monday gains against major currencies, or added to them, after the U.S. Commerce Department said gross domestic product rose at an 8.2 percent annual rate, more than double the second quarter?s 3.3 percent gain and the strongest quarterly advance in 19-1/2 years.

It was a higher-than-expected upward revision from initial estimate of 7.2 percent.

Wall Street looked set for a positive opening.

?This is a red hot economy,? said Patrick Fearon, an economist with A.G. Edwards & Sons. He warned, however that the pace is unlikely to continue.

Investors, betting that the US economy will drag the rest of the world along with it, had been anxiously waiting for the report. In the event there was a fairly muted response as a robust figure had been priced in earlier.

Positive business surveys in Germany earlier also failed to excite investors, who were firmly eyeing the United States.

?Germany?s Ifo index was a little better than expected but it is US, not euroland, data that is driving the market at the moment,? said Lee Ferridge, head of global currency strategy at Rabobank.

Germany?s Ifo said business confidence improved for a seventh consecutive month in November as a global economic recovery outweighed the impact of a stronger euro.

European stocks were generally higher having fluctuated in a bout of pre-data nerves.

The FTSE Eurotop 300 index of pan-European blue chips was off its highs, up 0.21 percent higher, while the narrower DJ Euro Stoxx 50 index was up 0.15 percent.

European indices have stalled in recent weeks as investors have become cautious after a spectacular rally that began in March.

Earlier, Japanese stocks ended higher after the rise on Wall Street. The Nikkei average finished up 1.09 percent or 107.37 points at 9,960.20. The broader TOPIX index of all first-section shares climbed 1.40 percent to 988.11.

Euro zone and U.S. government bond yields rose on the data but then fell back.

The 10-year Bund yield (EU10YT=RR was up 1.9 basis points at 4.41 percent while the two-year Schatz yield was up 3.9 basis points at 2.73 percent.

Ten-year US Treasury yields fell after a brief spike. They were down 3.4 basis points at 4.22 percent.

On foreign exchange markets, the dollar slipped against the euro, but held on to most of Monday?s gains, and rose against the yen.

The euro was up a quarter of a percent at $1.1794, after tumbling nearly one and a half cents on Monday. The dollar was up around a half a percent at 109.92 yen.

By Jeremy Gaunt, European Investment Correspondent