By Stephen Culp
NEW YORK (Reuters) - Wall Street rallied on Friday, with the Dow and the Nasdaq posting their eighth consecutive weekly gains as investors grew hopeful that the United States and China would hammer out an agreement resolving their protracted trade war.
All three major U.S. indexes ended the session higher, and for the fourth straight session, the S&P 500 held above its 200-day moving average, a key technical level.
Talks between the United States and China will resume in Washington next week, with both sides saying progress has been made toward resolving the two countries' contentious trade dispute.
Tariff-vulnerable industrials provided the biggest lift to the blue-chip Dow, led by bellwethers Boeing (NYSE:BA) Co, 3M (NYSE:MMM) Co, United Technologies (NYSE:UTX) Inc and Caterpillar Inc (NYSE:CAT).
"This may be just false hope with the tariff situation as thorny details still need to be agreed upon," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "It's good news but its not over yet."
Indeed, the trade row's effects were reflected in Deere & Co's earnings report, which came in below analyst estimates in part because of slowing international trade. The agricultural equipment manufacturer's shares fell 2.1 percent.
"Solving the trade issue could give global growth the boost it needs," Carter added. "Absent a tariff solution, growth will continue to slow."
With nearly 80 percent of S&P 500 companies having reported, fourth-quarter earnings season is largely in the rearview mirror. Analysts now see a profit increase of 16.2 percent for the quarter, according to Refinitiv data.
Going forward, however, the outlook continues to worsen. First quarter earnings are currently seen falling by 0.5 percent, the first year-on-year decline since mid-2016.
The Dow Jones Industrial Average rose 443.86 points, or 1.74 percent, to 25,883.25, the S&P 500 gained 29.87 points, or 1.09 percent, to 2,775.6 and the Nasdaq Composite added 45.46 points, or 0.61 percent, to 7,472.41.
All 11 major sectors in the S&P 500 ended the session in the black.
The rate-sensitive financial sector led the S&P 500's advance, bouncing back from Thursday's sell-off as U.S. Treasury yields crept back up.
Shares of PepsiCo (NASDAQ:PEP) were up 3.1 percent even after the snack and beverage company forecast a surprise drop in full-year profit.
Nvidia Corp rose 1.8 percent following the company's forecasts for its current fiscal year topped Wall Street expectations.
The chipmaker gave the second-largest boost to the closely-watched Philadelphia SE Semiconductor index, which was up 0.5 percent. The index has jumped nearly 18 percent so far this year.
Amazon.com (NASDAQ:AMZN) shares were down 0.9 percent after scrapping its plans for a New York headquarters.
In fact, each of Amazon's fellow FAANG members, a group of momentum stocks which also includes Facebook Inc (NASDAQ:FB), Apple Inc (NASDAQ:AAPL), Netflix Inc (NASDAQ:NFLX) and Google parent Alphabet (NASDAQ:GOOGL) Inc also ended the session in the red.
Advancing issues outnumbered declining ones on the NYSE by a 3.66-to-1 ratio; on Nasdaq, a 2.58-to-1 ratio favored advancers.
The S&P 500 posted 47 new 52-week highs and no new lows; the Nasdaq Composite recorded 86 new highs and 16 new lows.
Volume on U.S. exchanges was 7.07 billion shares, compared to the 7.43 billion average over the last 20 trading days.