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US stocks rise after weak US growth report

Jan 29 2016 17:08

New York - US stocks opened higher on Friday after a weak US fourth-quarter growth report raised expectations the Federal Reserve would hold off on further interest rate increases.

About 20 minutes into trade, the Dow Jones Industrial Average was up 182.58 points (1.14%) to 16 252.22.

The broad-based S&P 500 rose 18.88 (1.00%) to 1 912.24, while the tech-rich Nasdaq Composite Index gained 48.06 (1.07%) to 4 554.74.

Global markets were in rally mode after the Bank of Japan announced a surprise cut in interest rates into negative territory for the first time in a bid to spur its economy and battle deflation.

The BOJ's move "is really a tacit admission that the outlook stinks," said analyst Patrick O'Hare.

In the US, fourth-quarter economic growth came in at just 0.7%, much slower than the 2.0% in the third quarter and below the 0.9% expected by analysts.

The report came just two days after the Federal Reserve showed greater concern about the global economy, but left in place the possibility that it could hike interest rates again in March.

However, some analysts believe the weak GDP report makes a March rate hike less likely.

"All components of private-sector growth are flashing warning signs," said economist Chris Low of FTN Financial. "Maybe the Fed should rethink this whole tightening thing."

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