In the first exchanges, the Dow Jones Industrial Average advanced 43.95 points (0.52 per cent) to 8,512.44 and the tech-rich Nasdaq rose 5.20 points (0.34 per cent) to 1,530.10.

The broad Standard & Poor's 500 index increased 4.61 points (0.53 per cent) to 872.76.

'The stories of note for the time being include news that the Fed, using emergency powers, approved GMAC's application to become a bank holding company,' said Patrick O'Hare of Briefing.com.

The US Federal Reserve on Wednesday approved a request by GMAC, the troubled financial arm of General Motors, to become a bank holding company, clearing the way for it to receive a share of government bailout funds and emergency loans.

The move, announced only hours before Christmas day, boosts the prospects of General Motors after the US government last week approved a US$13.4 billion (S$19.4 billion) rescue loan package for GM and Chrysler to stave off collapse amid tight credit and dismal sales.

GMAC faced possible bankruptcy, jeopardizing financing for GM car dealers and customers, and its demise could have dragged down the Detroit automaker's fortunes with it.

The US market was closed on Thursday for the Christmas holiday. -- AFP