Stocks Rise in Afternoon Trading Amid Trade Talk Optimism

Plans by the U.S. and China to extend key trade talks drove stocks broadly higher in afternoon trading Friday, lifting the Dow Jones Industrial Average more than 300 points.

The gains mark a turnaround after the market ended modestly lower Thursday following a disappointing holiday sales report. The benchmark S&P 500 index had risen the previous four trading days.

China’s government said negotiators will meet in Washington next week for more talks aimed at ending the trade war between the world’s largest economies. Two days of talks wrapped up Friday in Beijing and a March 2 deadline hangs over both sides.

After that the U.S. is set to impose additional tariffs on Chinese goods, escalating a trade war that has already raised costs for companies and consumers.

Financial, health care, industrial and technology stocks accounted for much of the broad gains.

Corporate earnings continued rolling out as the fourth-quarter reporting period nears an end. Newell Brands, maker of Sharpie pens and Rubbermaid containers, plunged. Chipmaker Nvidia rose on strong profits and a good forecast for the year.

So far, S&P 500 companies have reported 13.1 percent earnings growth for the October-December quarter, better than the 12.1 percent gain projected by analysts. But the outlook for earnings growth in the first three months of 2019 has dimmed. Analysts forecast that corporate profits will fall in the current quarter, according to FactSet. That would represent the first decline in nearly three years.

KEEPING SCORE: The Dow Jones Industrial Average climbed 328 points, or 1.3 percent, to 25,767 as of 1:22 p.m. Eastern Time. The S&P 500 index gained 0.8 percent and the Nasdaq composite rose 0.3 percent. The Russell 2000 index of smaller companies picked up 1.6 percent. Major European indexes also rose.

WHEN THE CHIPS ARE UP: Chipmaker Nvidia rose 2.3 percent after reporting a strong fourth-quarter profit. Despite a downturn in revenue, the company expects demand to increase this year. Its forecast for the year topped Wall Street’s forecasts.

The company has been hurt by a plunge in demand from the cryptocurrency sector and lower gaming console sales.

NO COKE, PEPSI: Snack and beverage giant PepsiCo gained 3.2 percent despite relatively soft fourth-quarter results. Much like rival Coca-Cola on Thursday, the company gave investors a weak forecast for the year as it faces a stronger dollar. Unlike its rival, PepsiCo announced $8 billion in stock buy backs and a round of cost cuts.

DEERE IN HEADLIGHTS: Agricultural equipment maker Deere slid 2.2 percent after warning that farmers aren’t buying new equipment because of the ongoing trade war between the U.S. and China.

The company gave investors a mixed fourth-quarter report, with profit falling short and revenue beating forecasts. It also said tariffs had discouraged customers such as farmers from buying tractors and other machinery, an indication of how the U.S.-China trade dispute is hurting the manufacturing sector.

NOT SO SHARPIE: Newell Brands plunged 20.5 percent. The loss of retailer Toys R US hurt the company’s core sales. Newell makes a range of baby products that were carried by the now defunct Babies R US.

OIL: U.S. benchmark crude climbed 2 percent to $55.52 a barrel in New York. Brent crude, the standard for international oil prices, gained 2.2 percent to $66.02 a barrel in London.

BOND MARKET: 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.

CURRENCIES: The dollar rose to 110.57 yen from 110.49 yen on Thursday. The euro weakened to $1.1272 from $1.1301.