Stocks post strong finish as optimism over trade talks

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.

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.

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.”

The S&P 500 index gained 29.87 points, or 1.1 percent, to 2,775.60. The Dow climbed 443.86 points, or 1.7 percent, to 25,883.25.

The Nasdaq composite rose 45.46 points, or 0.6 percent, to 7,472.41. The Russell 2000 index of smaller companies picked up 24.14 points, or 1.6 percent, to 1,569.25. Major European indexes also finished higher, as did gold and crude oil prices.

U.S. benchmark crude climbed 2.2 percent to settle at $55.59 a barrel in New York. Brent crude, the standard for international oil prices, gained 2.6 percent to close at $66.25 a barrel in London.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.67 percent from 2.65 percent late Thursday. That yield is used to set rates on mortgages and other kinds of loans.

The dollar fell to 110.45 yen from 110.49 yen on Thursday. The euro weakened to $1.1295 from $1.1301.

Gold rose 0.6 percent to $1,322.10 an ounce. Silver gained 1.4 percent to $15.74 an ounce. Copper added 0.9 percent to $2.80 a pound.