U.S. stocks tick up after China cuts bank reserve ratio

U.S. stocks turned higher after wavering around flatline in the morning session Monday, as China's central bank announced a cut in its reserve requirement ratio (RRR) for commercial banks by 0.5 percentage points.

By midday, the Dow Jones Industrial Average rose 63.45 points, or 0.38 percent, to 16,703.42. The S&P 500 added 7.66 points, or 0.39 percent, to 1,955.71. The Nasdaq Composite Index gained 23.67 points, or 0.52 percent, to 4,614.15.

The move of People's Bank of China (PBOC), the first cut of its kind this year, aims to "ensure reasonably ample liquidity in the financial system; guide a stable and appropriate growth in credit; and create a favorable financial environment for supply-side structural reform," said China's central bank Monday in a statement.

To boost economic growth, which in 2015 slowed to its lowest level in a quarter of a century, the central bank lowered the RRR five times last year.

On the U.S. economic front, following the highest average year for the index in nearly a decade, pending home sales declined to begin 2016 but remained slightly higher than a year ago, according to the National Association of Realtors Monday.

The Pending Home Sales Index decreased 2.5 percent to 106.0 in January from an upwardly revised 108.7 in December.

Meanwhile, investors were still sifting through the country's economic growth data for the fourth quarter of 2015.

According to the second estimate released Friday by the Commerce Department, U.S. real gross domestic product (GDP) increased at an annual rate of 1.0 percent in the fourth quarter of 2015, beating the market consensus of 0.4 percent.

In the previous estimate, the increase in real GDP for the fourth quarter of 2015 was 0.7 percent.

On Friday, U.S. stocks closed mixed after wavering in a tight range, as Wall Street digested the newly-released GDP report. Endit