Wall Street rallies to commercial optimism

NEW YORK (Reuters) – Wall Street regained momentum on Friday as the Dow Jones and Nasdaq registered their eighth consecutive weekly gain as investors increasingly hope the US and China reach a deal ending their long trade war.

The three leading US indices closed the session higher, and for the fourth consecutive session, the S & P 500 remained above its 200-day moving average, a key technical level.

Negotiations between the United States and China will resume in Washington next week. Both sides said progress has been made in resolving the controversial trade dispute between the two countries.

Vulnerable tariff-related industrial enterprises were the primary means of transportation for the leading group, Dow, led by Boeing Co bells makers, 3M Co, United Technologies Inc. and Caterpillar Inc.

"This may just be a false hope with the pricing situation as thorny details have yet to be settled," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "It's good news but it's not over yet.

Indeed, the effects of the trade sector were reflected in Deere & Co's earnings report, which was lower than analysts' estimates, partly because of the slowdown in international trade. Farm equipment manufacturer's shares fell 2.1%.

"Solving the trade problem could give global growth the momentum needed," said Carter. "In the absence of a tariff solution, growth will continue to slow down."

With nearly 80% of the S & P 500 companies reporting their results, the fourth quarter earnings season is largely in the rear-view mirror. Analysts now see a 16.2% increase in earnings for the quarter, according to Refinitiv data.

However, the outlook continues to deteriorate. First quarter profits are currently down 0.5%, the first decrease in a year since mid-2016.

The Dow Jones Industrial Average rose 443.86 points, or 1.74%, to 25,883.25, the S & P 500 by 29.87 points, or 1.09%, to 2,775, 6 and the Nasdaq Composite added 45.46 points, or 0.61%, to 7,472.41.

The 11 main sectors of the S & P 500 ended the black session.

The money-sensitive financial sector dominated the S & P 500's lead, bouncing back from Thursday's sale as US Treasury yields rose.

PepsiCo shares rose 3.1%, even after the snack and beverage manufacturer forecast a surprise fall in annual profit.

Nvidia Corp increased by 1.8%, according to the company's forecast for its current fiscal year, exceeding Wall Street's expectations.

The chip maker gave the second largest boost to the closely watched Philadelphia SE Semiconductor index, up 0.5%. The index has jumped nearly 18% so far this year.

Shares of Amazon.com fell 0.9% after canceling plans for a New York headquarters.

In fact, each of Amazon's Amazon FAANG members, a Momentum share group that also includes Facebook Inc., Apple Inc., Netflix Inc., and Google parent Alphabet Inc., also ended the session in the red.

Increasing issues outnumbered declining issues at the NYSE by a ratio of 3.66 to 1; on the Nasdaq, a ratio of 2.58 to 1 favored the advanced.

The S & P 500 has recorded 47 new highs over 52 weeks and no new lows; the Nasdaq Composite recorded 86 new highs and 16 new lows.

The volume of US trade amounted to 7.07 billion shares, against 7.43 billion on average over the last 20 trading days.