Gross domestic product was revised down for the third quarter, at 1.8 percent versus the previous 2 percent estimate, on a sharp drop in healthcare spending, but stronger business investment and a fall in inventories pointed to a pickup in output in the current period.

On the labor front, initial jobless claims hit a 3-1/2 year low, suggesting the labor market recovery was gaining speed.

" It appears to be the case we had more inventory liquidation than we thought, which means that if end-of-market demand remains strong in Q4 and it apparently is, then we should be looking at an inventory restocking cycle that commences. And we have confirmation that started in October, looking at the manufacturing and wholesale inventory numbers," said Phil Orlando, chief equity market strategist at Federated Investors in New York.

" Clearly the year has ramped nicely, based on an improving economic picture. The double-dip fear the bears were talking about in the second half of the year is off the table at this point and investors are seeing domestic fundamentals are in pretty good shape."