Wall St surges on GDP, earnings

United States stocks are sharply higher in early afternoon trade after a report on United States economic growth boosted optimism the world's largest economy was continuing to gather momentum.

Investors also welcomed strong earnings reports, with Facebook's profit result seen as a catalyst for a strong surge in the tech-heavy Nasdaq.

Facebook beat market expectations in an earnings update after the close of trade yesterday and was seen climbing 16% to a record high.

At 0500 AEDT, the Dow Jones Industrial Average had gained 160.92 points, or 1.02%, to 15,899.71.

The broad-based S&P 500 jumped 24.16 points, or 1.36%, to 1,798.36, while the Nasdaq soared 82.44 points, or 2.03%, to 4,133.87.

The strong market gains offset a sharp fall on Wall Street yesterday, which was driven by concerns around a taper of economic stimulus from the US Federal Reserve and persistent worries about emerging market economies.

The latter remains a concern as the positive impact of South African and Turkish rate rises on their respective currencies continues to wane and emerging European economies like Poland and Hungary become collateral damage.

"Things look okay at the moment, yet market sentiment has become somewhat frazzled with the increased volatility, the uncertainty surrounding emerging markets, and the simple recognition that 2014 has gotten off to a weak start," Briefing.com analyst Patrick O'Hare said in a morning note.

"A batch of better-than-expected earnings results, highlighted by an impressive report from Facebook and a solid report from Visa, and a 3.2 % reading for Q4 GDP are providing some needed support."

US gross domestic product grew 3.2% in the fourth quarter, which was broadly in line with market expectations. Meanwhile, weekly jobless claims came in higher than expected, though this was largely put down to seasonal volatility.

Housing data was also weaker-than-expected, but investors were largely focussed on the strong growth number.