While you were sleeping: UPDATED Dow rises as China concerns ease

Wall Street moved higher as investors found value in beaten-down stocks as the latest data from China eased some concern about the outlook for the global economy. Gains were checked as US oil slipped.

While China reported economic growth that was the most tepid in 25 years, it still expanded 6.9% last year, compared with 7.3% in 2014.

"The slowdown in China is nowhere near as bad as markets feared, plus officials have the ability to intervene and stimulate growth," Justin Urquhart Stewart, co-founder of Seven Investment Management in London, told Bloomberg. "Though sentiment is still at rock bottom, valuations have been so squeezed that any sign of corporate health should help."

Wall Street recovered after last week's big drop. The Dow Jones Industrial Average rose 74.03 points, or 0.5%, to 16,062.11, after rising close to 184 points early in the session. The S&P 500 added 0.4% to 1887.51, with gains limited by a 2.2% decline in the index’s energy stocks. The Nasdaq Composite rose 0.1% to 4493.35.

US oil futures fell 3.3% to $US28.46 a barrel, the lowest level since September 2003, in the first trading session since sanctions were lifted against Iran. 

On Monday, US markets were closed for the Martin Luther King Jr holiday.

Banks report profits
Corporate earnings reports continue to pour in. Morgan Stanley said it swung to a profit in the fourth quarter, though it weathered a slump in debt-market trading. Its shares rose 1.1% to $US26.26.

Bank of America also reported a rise in fourth-quarter profit, though revenue came in below analysts’ expectations. Shares fell 1.5% to $US14.24.

Revenue growth will be "challenging," even as the US economy improves, BoA chief financial officer Paul Donofrio said on a call with analysts, according to Bloomberg.

The bank's energy loans were $US21.3 billion, or 2% of the total outstanding, he noted.

"As we continue to assess and react to future changes in the energy sector we could see lumpiness that could potentially drive provision expense over $US900 million," Mr Donofrio said.

Delta shares rose 3.3% to $US45.95 after the airliner said lower fuel costs helped drive profits in the last quarter.

'Oil drowning in oversupply'
Global oil markets could "drown in oversupply" and prices could move lower, according to the International Energy Agency in its first monthly report of the year.

Separately, the International Monetary Fund downgraded its estimate for global growth outlook, thanks to China's economic slowdown, a stronger US dollar and geopolitical tensions.

The global economy will grow 3.4% this year, down from an October estimate of 3.6%, according to the IMF in its quarterly update to its World Economic Outlook, while lowering its 2017 growth estimate to 3.6%, down from 3.8%.

"This coming year is going to be a year of great challenges and policymakers should be thinking about short-term resilience and the ways they can bolster it, but also about the longer-term growth prospects," Maurice Obstfeld, IMF economic counsellor and director of research, said in a statement.

"Those long-term actions will actually have positive effects in the short run by increasing confidence and increasing people's faith in the future."

In Europe, the Stoxx 600 Index finished the session with a 1.3% advance from the previous close. Germany's DAX Index added 1.5%, the UK's FTSE 100 Index gained 1.7%, while France's CAC 40 Index climbed 2%.

Here, better-than-expected corporate earnings including from Unilever and Software added to sentiment.

In the US, Bank of America shares fell, last trading 2.1% weaker, after the bank reported its latest quarterly earnings.

Updated for Wall Street close at 10am (NZ time)

(BusinessDesk)