US open: Stocks gain as US fourth quarter GDP revised higher

US stocks opened on the front foot on Friday as oil prices rebounded and fourth quarter economic growth data was unexpectedly revised higher.

The Dow Jones Industrial Average rose 0.46%, the Nasdaq climbed 0.65% and the S&P 500 gained 0.48% at 1441 GMT.

Oil prices reversed the previous day’s declines as traders closed short positions, with West Texas Intermediate crude rising 2.7% to $34.01 per barrel and Brent increasing 3.2% to $36.48 per barrel at 1421 GMT.

The Commerce Department’s second estimate of US gross domestic product growth for the fourth quarter was revised to an annualised 1% from an initial 0.7%, surprising analysts who had expected a 0.4% increase.

“Financial markets were expecting a slowdown in the world’s largest economy, so much so that conversations about a recession weren’t far away," said Dennis de Jong, managing director at UFX.com.

“Yet, with unemployment remaining low and wages increasing at their fastest rate since 2009, growth is back on the agenda. Add to that cheap fuel prices and low mortgage rates, and it may only be a matter of time until disposable incomes are fully realised and growth continues to speed up.”

Elsewhere, China’s central bank hinted at further stimulus measures to boost the flagging economy. People’s Bank of China Governor Zhou Xiaochuan said there were more tools in the central bank’s policy to help turnaround the slowdown.

“While the reform direction is clear, managing the reform pace will need windows (of opportunity) and conditions...The pace will vary, but the reform will be set to continue and the direction is not changed,” Zhou said at a conference held by the Institute of International Finance in Shanghai in conjunction with a G20 meeting of central bank governors and finance ministers.

The news saw Asian equity markets close mostly higher on Friday.

Still to come, US personal income, spending and consumption data will be released at 1500 GMT while the University of Michigan consumer confidence survey is also out at the same time.

In company news, shares in JC Penney surged after it reported fourth quarter earnings that were better than expected as well as an upbeat profit forecast.

Gap slumped as its full year adjusted profit guidance fell short of analysts’ estimates.

Foot Locker dropped despite fourth quarter results that came in above expectations.

The dollar rose 0.15% against the pound, increased 0.51% against the euro and climbed 0.51% against the yen.