For 2017, the economy grew 2.3%, higher than 1.5% growth in 2016.
Donald Trump, in an interview, said the U.S. economy could grow "much higher" than 3% and that cutting regulations has allowed as much as $4 trillion in new overseas investment.
The Dow was up by 223 points, or 0.85%, to close at 26,616. The S&P 500 jumped 1.18% and the Nasdaq rose 1.28%
Trump's speech followed a turbulent week for U.S. economic policy that included tariffs on imported goods from China and South Korea, threats to leave the North American Free Trade Agreement and the first apparent reversal of the country's "strong dollar" policy in at least a generation.
In remarks released before his speech at Davos from an interview with CNBC television, Trump also insisted that no one should be "talking down" the U.S. dollar and argued that its value should be based on the strength of the broader economy.
"I'll tell you where I stand, which ultimately is very important," he said. "No. 1, I don't like talking about it because, frankly, nobody should be talking about it ... it should be what it is and it should also be based on the strength of the country."
The dollar index, a measure of the greenback's strength against a basket of six global currencies, slipped 0.5%% to 89.00 despite Trump's attempt to support the currency.
Honeywell International Inc. (HON) said Friday adjusted earnings in the fourth quarter were $1.85 a share, topping Wall Street forecasts by 1 cent. The company also raised its 2018 earnings outlook. The stock rose nearly 2%.
Intel Corp. (INTC) jumped 10.5% on Friday after the giant chipmaker beat both fourth-quarter earnings and revenue expectations and issued strong full-year guidance for 2018. Intel also announced it was increasing its dividend by 10% to $1.20 a share.
Colgate-Palmolive Co. (CL) said fourth-quarter sales rose 4.5% to $3.9 billion, slightly below estimates, while adjusted earnings of 75 cents a share matched forecasts. Shares fell 5%.
VMware Inc. (VMW) jumped 12% after reports said Dell Technologies was considering the acquisition of the remaining portion of VMware that it doesn't already own.
Wynn Resorts Ltd. (WYNN) fell 10% after The Wall Street Journal ran an expose that detailed reports from dozens of women who described a pattern of sexual abuse perpetrated by Steve Wynn, the man behind the Wynn Resorts Ltd. (WYNN) casino empire.
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