Wall St closes higher on US trade data

AAP, with a staff reporter

US stocks closed strongly higher following an unexpected drop in the trade deficit and strong trade data out of China.

The Dow Jones Industrial Average gained 48.92 points, or 0.35 per cent, to close at 13,992.97 points.

The S&P 500 index closed up 8.54 points, or 0.57 per cent, to 1,517.93 points.

The tech-rich Nasdaq Composite Index jumped 28.74 points, or 0.91 per cent, to close at 3,193.87 points.

The US trade deficit shrank more than expected in December, to $US38.5 billion ($A37.64 billion) instead of the $45.4 billion estimated by analysts.

It was announced on Friday that China's trade surplus rose sharply in January, with both exports and imports beating expectations, as the country maintained its economic recovery on improving demand.