Markets surge on China hopes
Financial, health care, tech lead rally
The Dow Jones Industrial Average surged more than 400 points Friday as renewed optimism over trade talks between the U.S. and China put investors in a buying mood.
The rally marked a turnaround from a day earlier, when disappointing holiday sales data led to a modest sell-off. Friday’s gains helped push the benchmark S&P 500 index to its third-consecutive weekly gain. The S&P 500 index gained 1.1 percent Friday and the Dow climbed 1.7 percent.
Financial, health care, technology and industrial stocks accounted for much of the broad wave of buying. U.S. markets will be closed Monday in observance of Presidents Day.
Two days of trade talks wrapped up Friday in Beijing. China’s government said negotiators will meet in Washington next week for more negotiations aimed at ending the trade war between the world’s largest economies.
A March 2 deadline hangs over both sides, after which the U.S. is set to impose additional tariffs on Chinese goods, escalating a trade dispute that has already raised costs for companies and consumers. President Donald Trump has said that there is a possibility he would extend that deadline if the two countries are close to a deal, however.
Wall Street has been encouraged by the signals that Chinese and U.S. officials have sent in the latest round of trade talks that began Monday.
That’s given investors “hopefulness and maybe optimism surrounding some sort of resolution between the U.S. and China,” said Willie Delwiche, investment strategist at Baird. “And maybe (both sides) keep talking and maybe delaying the implementation of the tariffs that are supposed to come into effect” on March 2, Delwiche said, “so, it’s evidence of progress.”
On Friday, U.S. Trade Representative Robert Lighthizer told Chinese President Xi Jinping negotiators “made headway” in talks this week in Beijing.