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New York (CNN Business)US stocks climbed higher on Thursday after some better-than-expected economic data distracted from the increasingly hawkish tones of the Federal Reserve.
The
Dow
(INDU) was up more than 390 points, or 1.2%, in the late morning, while the
S&P 500
(SPX) rose 0.9%. The
Nasdaq Composite
(COMP) was lagging behind the other two indexes, trading up only 0.5%.
It has been a
turbulent few weeks in the market amid worries about inflation, economic growth, Fed policy and the Russia-Ukraine situation. The S&P 500, which started the new year with a record high, has since closed in the green only five times. Thursday could be No. 6.
Before the opening bell, data showed America's economy expanded by 5.7% in 2021, the
best performance since the Reagan administration. The fourth quarter of the year also beat economists' forecasts with an annualized growth rate of 6.9%.
The data distracted investors from the increasingly hawkish Federal Reserve, which on Wednesday signaled a
first interest rate increase could come in March.
That said, economists predict that the solid end to 2021 could come at the expense to a wobbly start to 2022 as the Omicron variant of the coronavirus is weighing on business activity.
"Investors should not worry too much about weak-ish January economic data, as it is likely temporary, but certainly there does seem to be the added whiff of stagflation in some of the consumption data recently," said John Vail, chief global strategist at Nikko Asset Management, in emailed comments.
Earnings season continues in full swing with
Apple
(AAPL) due to report after the close. The company's shares were up 1.6%.