Consumer spending grew at a 3.2 percent rate, but its contribution to overall domestic growth was undercut by a sharp cutback in inventory building, which resulted in a 1.5-percent increase in the government's first reading in gross domestic product in the third quarter, the Commerce Department said. Benchmark 10-year Treasuries notes fell 13/32 in price to yield 2.140 percent, up 5 basis points on the day. With the increase on the day, the ten-year yield added to the 6.4 basis point gain posted on Wednesday to reach its highest closing level in over a month. The Federal Reserve, which kept its rates on hold as expected on Wednesday, took the unusual step of strengthening its language about timing in its statement, making it clear that a December rate hike was still possible. Reference to a particular meeting is rare for the USA central bank. It ended down 0.55 percent on Thursday. But economists expect growth to pick up in the fourth quarter, given strong consumer spending figures. Earlier in Asia, Japan's Nikkei share average gained 0.2 percent to close at 18,935.71. The euro extended its losses, slipping about 0.1 percent to $1.0919 EUR= after skidding to a 2-1/2 month low of $1.0826 overnight. The Dow moved lower as slides in shares of Intel and those of Pfizer, last 1.8 percent and 1.7 percent weaker respectively, overshadowed gains in shares of Procter & Gamble and those of Wal-Mart, last up 0.8 percent and 0.7 percent respectively. The Fed's explicit indication that it will assess progress towards its objectives in determining whether it will be appropriate to raise rate at its "next meeting" was also highlighted. The dollar index.DXY, which tracks the US unit against a basket of six of its major peers, was down about 0.2 percent at 97.594, but still not far from a 2-1/2-month peak of 97.818 scaled after the Fed's message. In oil markets, Brent crude traded at around $48.46 a barrel, down 1.16 percent, while USA crude was at around $45.51 a barrel, down 0.96 percent.

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