Wall Street's main indexes back to grind over trade talks optimism

Wall Street's main indexes rose on Friday, putting them on track to end the final trading day of the first quarter on a strong note, boosted by optimism over trade talks between the United States and China.

The two sides said they made progress on trade talks, which concluded on Friday in Beijing that Washington called "candid and constructive", while Chinese state news agency reported the two countries discussed "relevant agreement documents". A Chinese delegation led by Vice Premier Liu He will head to Washington next week for another round of talks.

"The conclusion of U.S.-China trade talks on the surface, is being taken as a positive step towards a meaningful deal," said Peter Cecchini, managing director and chief market strategist at Cantor Fitzgerald in New York. Trade-sensitive industrials rose 0.74 per cent, while chipmakers, which have a large revenue exposure to China, also gained, with the Philadelphia chip index jumping 1.29 per cent.

The broader technology sector gained 0.67 per cent higher. "It's the end of the quarter and the first quarter looks like it's one of the best in years, even on the back of muted or mixed economic data," said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.

The benchmark index has risen 12.8 per cent so far this quarter, its best performance since September 2009. Latest data showed U.S. consumer spending barely rose in January and income increased modestly in February, suggesting the economy was fast losing momentum after growth slowed in the fourth quarter.

Growth fears were triggered last week when the Federal Reserve abandoned projections for interest rate hikes in 2019 and the U.S. Treasury yield curve inverted for the first time since 2007, a historical indication of recession. However, the yield curve between three-month bills and 10-year notes turned slightly positive on Friday.

At 12:57 p.m. ET the Dow Jones Industrial Average was up 152.24 points, or 0.59 per cent, at 25,869.70. The S&P 500 was up 11.97 points, or 0.43 per cent, at 2,827.41 and the Nasdaq Composite was up 44.08 points, or 0.57 per cent, at 7,713.24. With the first quarter earnings season just about two weeks away, investors are bracing for what may be the first U.S. profit decline since 2016.

Analysts expect quarterly earnings to fall 1.9 per cent, according to Refinitiv data. Ride-hailing startup Lyft Inc surged more than 20 per cent after making its debut on the Nasdaq.

Celgene Corp jumped 7.75 per cent after proxy advisory firm Institutional Shareholder Services backed rival drugmaker Bristol-Myers Squibb Co's vote in favor of a proposed takeover of the company. Bristol-Myers fell 1.19 per cent. Advancing issues outnumbered decliners by a 1.68-to-1 ratio on the NYSE and by a 1.39-to-1 ratio on the Nasdaq.

The S&P index recorded 32 new 52-week highs and two new lows, while the Nasdaq recorded 43 new highs and 36 new lows.