The US economy grew at its fastest rate in more than two years in the third quarter, the US Commerce Department reported, and was poised for a slight boost next year from the tax bill passed by the Republican-led Congress.

Investors were hopeful the tax plan, which slashes corporate income tax rates to 21 percent from 35 percent, would allow companies to deploy additional capital on dividends, new projects and wages.

The Dow Jones Industrial Average rose 112.11 points, or 0.45 percent, to 24,838.76, the S&P 500 gained 10.38 points, or 0.39 percent, to 2,689.63 and the Nasdaq Composite added 22.41 points, or 0.32 percent, to 6,983.37.

MSCI's gauge of stocks across the globe gained 0.36 percent. The pan-European FTSEurofirst 300 index rose 0.64 percent

"The impact is still a work-in-progress, tax cuts are believed to add to earnings. But the unknowns are to what extent the company behavior changes in terms of capex policy, buybacks and wage increases," said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis.

US Treasury yields held at lower levels with 10-year yields scaling back from a nine-month peak, providing a respite from a sharp three-day bond market selloff tied to the tax plan.

Bond investors have been concerned that adding fiscal stimulus amid full employment will reinforce the Federal Reserve's haste with raising interest rates, pushing up short-term yields.

The Bank of Japan showed no inclination to rethink its aggressive stimulus policy at a board meeting on Thursday. Currency investors are assuming the BOJ will keep Japanese bond yields super-low for a long while and have been nudging the yen lower in response.

The US dollar edged higher after two days of losses in light trading on the back of the robust economic data.

In Europe, despite political uncertainty due to the Catalonia independence election, there was only modest stress in Spain's markets and none on the euro.

The euro was unchanged at $1.1869.

Gold held near an earlier two-week high after strong US economic data firmed up the dollar.

Oil prices dipped slightly after the operator of Britain's Forties pipeline in the North Sea said it expected to restart in early January after repairs over Christmas. Oil prices had risen since the pipeline was shut on Dec 11.

US crude rose 0.14 percent to $58.17 per barrel and Brent was last at $64.59, up 0.05 percent