Stocks climb as hopes rise for U.S.-China trade talks

Stocks rose late in the day Friday as investors welcomed signs of progress in resolving the trade dispute between the United States and China. The Wall Street Journal reported that the countries hope to have a resolution by November.

Industrial, healthcare and basic materials companies made some of the biggest gains.

The Journal report came the day after China said it will send an envoy to Washington for the first talks between the countries since early June.

Marina Severinovsky, an investment strategist at Schroders, said stocks could jump if the United States and China make real progress toward a trade agreement. But stocks in emerging markets might make even bigger gains.

“The rally that could come, if there is a better outcome, would be in emerging markets,” she said. “China has suffered pretty greatly; the U.S. has held up pretty well.”

The late gains came despite weak results for several chipmakers. Electric-car maker Tesla took its biggest drop in two years on reports of a wider government investigation into the company and concerns about Chief Executive Elon Musk’s health.

The Standard & Poor’s 500 index rose 9.44 points, or 0.3%, to 2,850.13. The Dow Jones industrial average advanced 110.59 points, or 0.4%, to 25,669.32. The Nasdaq composite edged up 9.81 points, or 0.1%, to 7,816.33. The Russell 2000 index of smaller-company stocks rose 7.19 points, or 0.4%, to 1,692.95.

The Journal cited officials in the United States and China as it said negotiators want to end the trade war before President Trump and Chinese President Xi Jinping meet at multilateral events in November.

Industrial companies made some of the biggest gains after agricultural equipment maker Deere posted stronger sales than expected. Deere shares rose 2.4% to $140.59.

Construction equipment maker Caterpillar rose 2.3% to $139.34. Engine maker Paccar rose 2.3% to $67.16.

Chipmakers fell after two companies gave weaker third-quarter forecasts. Nvidia said it no longer expects much revenue from products used in mining digital currencies, and its stock fell 4.9% to $244.82. Applied Materials slumped 7.7% to $43.77.

Big names such as Netflix, Facebook and Amazon slipped, but Apple led technology companies slightly higher overall. Apple’s stock rose 2% to $217.58.

Nordstrom jumped 13.2% to $59.18 after raising its annual profit and sales forecasts and posting better earnings and sales than analysts expected. It has been a mostly difficult week for department stores: Macy’s and J.C. Penney plunged after issuing their quarterly reports.

The S&P 500 finished this week with a solid gain of 0.6%, but it took a difficult path to get there. Stocks fell early this week due to worries about Turkey’s currency crisis, and later investors fretted about China’s economic growth.

The recovery started Thursday as investors hoped the upcoming talks between the United States and China will help end the impasse that has resulted in higher tariffs from both countries.

The Hang Seng index in Hong Kong has fallen 13% since early June as the dispute has dragged on, and other emerging market indexes have also taken a hit. The S&P 500 has risen over that time.

Tesla was hit by a series of reports that worried shareholders. The Wall Street Journal reported that the Securities and Exchange Commission started investigating the automaker last year to determine whether it made false statements about production of its Model 3 sedan.

The SEC reportedly is also looking into CEO Musk’s tweet from last week about possibly taking the company private.

Tesla stock rose from about $345 a share to about $380 after Musk’s tweet last week, which said Tesla could go private for $420 a share. On Friday it dropped 8.9% to $305.50.

Musk also gave an emotional interview to the New York Times, published Friday, about the stress he has experienced as the automaker tries to ramp up production. He said this year has been “excruciating” and described working up 120 hours a week, raising concerns about his health.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.86% from 2.87%.

U.S. crude rose 0.7% to $65.91 a barrel in New York. Brent crude, the standard for international oil prices, rose 0.6% to $71.83 a barrel in London.

Wholesale gasoline fell 0.3% to $1.98 a gallon. Heating oil inched up 0.1% to $2.10 a gallon. Natural gas rose 1.3% to $2.95 per 1,000 cubic feet.

Gold was little changed at $1,184.20 an ounce. Silver fell 0.6% to $14.63 an ounce. Copper rose 0.5% to $2.63 a pound.

The dollar fell to 110.60 yen from 110.88 yen. The euro rose to $1.1443 from $1.1365.

UPDATES:

3:35 p.m.: This article was updated with closing prices, context and analyst comment.

1:15 p.m.: This article was updated with the close of markets.

This article was originally published at 11:10 a.m.