WASHINGTON (dpa-AFX) - Stocks moved sharply higher over the course of the trading session on Friday, extending the strong upward move seen over the two previous sessions. With the rally over the past few sessions, the major averages more than offset the steep drop seen on Monday and Tuesday.
The major averages pulled back off their best levels going into the close but remained firmly positive. The Dow jumped 319.92 points or 1.2 percent to 26,816.59, the Nasdaq spiked 106.26 points or 1.3 percent to 8,057.04 and the S&P 500 surged up 32.14 points or 1.1 percent to 2,970.27.
For the week, the Dow and the Nasdaq both advanced by 0.9 percent, while the S&P 500 climbed by 0.6 percent.
The rally on Wall Street came as traders expressed continued optimism about U.S.-China trade talks, with President Donald Trump announcing late in the trading day that the two economic superpowers have reached a 'very substantial phase one deal.'
Trump said the deal includes up to $40 to $50 billion in Chinese purchases of U.S. agricultural products as well as Chinese concessions on intellectual property and financial services.
In exchange for the concessions by China, the U.S. has agreed to hold off on an increase in tariffs originally scheduled for next week.
Trump said the agreement would take about three weeks to write and would likely be signed by both sides by the Asia-Pacific Economic Cooperation summit in Chile in November.
'Phase two will start almost immediately' after the first phase is signed, Trump said in an Oval Office meeting with China's lead negotiator, Vice Premier Liu He.
Stocks spiked early in the session as Trump made upbeat comments about the negotiations on Twitter, tweeting, 'Good things are happening at China Trade Talk Meeting. Warmer feelings than in recent past, more like the Old Days.'
Trump noted in a subsequent tweet that a potential trade deal with China would not have to go through the 'very long and politically complex Congressional Approval Process.'
Oil service stocks moved sharply higher over the course of the trading session, driving the Philadelphia Oil Service Index up by 4.7 percent.
The rally by oil service stocks came amid a jump by the price of crude oil, with crude for November delivery surging up $1.15 to $54.70 a barrel.
Optimism about a U.S.-China trade deal also contributed to significant strength among steel stocks, as reflected by the 3.9 percent spike by the NYSE Arca Steel Index.
Semiconductor, transportation, chemical, and financial stocks also saw considerable strength on the day, reflecting broad based buying interest.
Meanwhile, gold stocks were among the few groups that bucked the uptrend, with the NYSE Arca Gold Bugs Index plunging by 4.6 percent.
The sell-off by gold stocks came amid a steep drop by the price of the precious metal, as gold for December delivery tumbled $12.20 to $1,488.70 an ounce.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index jumped by 1.2 percent, while Hong Kong's Hang Seng Index soared by 2.3 percent.
The major European markets also showed strong moves to the upside on the day. While the German DAX Index spiked by 2.9 percent, the French CAC 40 Index surged up by 1.7 percent and the U.K.'s FTSE 100 Index advanced by 0.8 percent.
In the bond markets, treasuries extended the sharp pullback seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 9.4 basis points to 1.752 percent.
Next week's trading may be impacted by further details about the U.S.-China trade deal along with reports on retail sales, housing starts, and industrial production.
A number of big-name companies are also scheduled to report their quarterly results next week as the earnings season gets underway.
Citigroup (C), Goldman Sachs (GS), Johnson & Johnson (JNJ), JPMorgan Chase (JPM) UnitedHealth (UNH), Wells Fargo (WFC), Bank of America (BAC), IBM Corp. (IBM), Netflix (NFLX), American Express (AXP), and Coca-Cola (KO) all due to report their results.
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