Stock indexes extend winning streak

Stocks closed broadly higher on Wall Street for the third straight day Thursday, led by solid gains in technology companies and banks.

The latest gains extend the market’s turnaround from the start of the week, when stocks nosedived as the trade conflict between the U.S. and China escalated, stoking investors’ fears about the fallout for the global economy and corporate profits.

Traders have since been encouraged by signals that Washington and Beijing are still planning to continue negotiations. And they’ve found relief in reports indicating that the U.S. is backing away from raising tariffs on auto imports from Europe and is making progress on lifting steel tariffs in North America.

“While we’ve seen a heightened rhetoric between the U.S. administration and the Chinese, we haven’t seen a significant global escalation at this point, so there’s a little bit of a relief in that,” said Eric Wiegand, senior portfolio manager for Private Wealth Management at U.S. Bank.

The S&P 500 index rose 25.36 points, or 0.9 percent, to 2,876.32. The Dow Jones Industrial Average climbed 214.66 points, or 0.8 percent, to 25,862.68. The index was briefly up 309 points.

The Nasdaq composite gained 75.90 points, or 1 percent, to 7,898.05. The Russell 2000 index of small company stocks picked up 8.97 points, or 0.6 percent, to 1,557.24.

Major stock indexes in Europe finished higher.

The S&P 500 is now up 2.3 percent from its close on Monday, when the benchmark index slumped after China issued retaliatory tariffs on U.S. goods, ratcheting up tensions between the two largest economies in the world.

The market has still not recovered all its losses since early last week, when President Donald Trump turned up the heat in the trade war by threatening to hike tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent. The S&P 500 is still down about 1.9 percent from its close on May 6.

The S&P 500, Dow and Nasdaq are still on track to end the week with losses, even after the three-day winning streak.

The Trump administration raised tariffs last Friday and spelled out plans to target the $300 billion worth of Chinese imports that aren’t already facing 25 percent taxes. The escalation covers everything from sneakers to toasters to billiard balls. The Chinese have retaliated by imposing tariffs on $60 billion in U.S. imports.

The escalation in trade tensions surprised investors who had been expecting a resolution. That confidence was a key component of the stock market’s sharp gains so far this year.

Stocks have been choppy the last two weeks as traders worried over the implications the escalating trade dispute could have for markets.