Stocks markets are facing mixed signals Friday as the U.S. economy put in a stronger than expected showing in the third quarter, and oil prices continued to climb.

The U.S. economy grew at a 3.8% annual rate in the third quarter, a strong showing amid the impact of hurricanes Katrina and Rita, and surpassing the expectations of economists.

Strong spending by consumers, businesses and government was credited for the U.S. economy’s better-than-forecast performance, the U.S. Commerce Department reported today.

Economists had been projecting annualized growth of 3.6 per cent for the July-to-September quarter.

Oil prices rose Friday amid lingering concerns that U.S. Gulf of Mexico oil facilities recovering from hurricane damage will struggle to meet heating oil demand as winter approaches. Light sweet crude for December delivery rose 26¢ to US$61.35 US a barrel in electronic trading on the New York Mercantile Exchange.

Here at home, Statistics Canada said monthly prices for manufactured goods at the factory gate were up in September, as gasoline and fuel oil prices continued to rise.

However, raw materials declined last month, following three monthly increases.

The Canadian dollar opened at US85.33¢, unchanged from Thursday.

In today’s earnings news, Rothmans Inc., said its second-quarter profit rose to $30.1 million from a year-earlier $26.4 million.

After markets closed Thursday, Fairfax Financial Holdings Ltd. reported a wider third quarter loss due to the impact of hurricanes Katrina and Rita. The Toronto-based insurance holding company booked a loss of US$220 million, or US$13.83 per diluted share for the quarter ended Sept. 30, compared with a loss of US$109.4 million, or US$8.08 per diluted share, for the same period last year.

In other financial news, Deutsche Bank AG, the biggest German bank by assets, said today its third-quarter profit jumped 46%, based on stronger returns on its investment banking activities.

In overseas trading, the Japanese Nikkei 225 index fell 70.54 points, or 0.53%, to 13,346.54 points on the Tokyo Stock Exchange.

In Hong Kong, the Hang Seng index fell 165.23 points, or 1.2%, to 14,215.83.

Toronto stocks ended lower Thursday, brought down by a sliding energy sector, despite gains in gold stocks and financials.

The S&P/TSX composite index fell 38.21 points, or 0.37%, to 10,245.45.

The financials sector gained 0.48%. The Royal Bank of Canada was up $1.24, or 1.52%, to $82.99.

Sun Life Financial Inc. said its third-quarter profit slipped 2.1% due to a $51 million after-tax charge related to the sale of a Chilean investment.

The insurer said net income for the quarter was $430 million or 74¢ a share, compared with $439 million, or 73¢ a share, in the year-before quarter. Sun Life’s shares closed up 60¢, or 1.4%, at $43.30.

The junior S&P/TSX Venture composite index ended essentially flat, up 0.74 of a point at 1,992.57.

In New York, a decline in durable goods orders in September, plus the perceived weakness of General Motors, around which bankruptcy rumors swirl, led the market lower.

The Dow Jones industrial average fell 115.03 points, or 1.1%, to 10,229.95. The Nasdaq composite index fell 36.24 points, or 1.7%, to 2,063.81. The S&P 500 was down 12.48 points, or 1.1%, to 1,178.90.

The U.S. Commerce Department said orders for long-lasting durable goods fell 2.1% in September, after a 3.8% jump in August.