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Stocks Move Mostly Higher On Optimism About Trade Talks - U.S. Commentary

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Stocks moved mostly higher over the course of the trading day on Friday, adding to the gains posted in the previous session. The major averages moved higher at start of trading and saw further upside as the day progressed.

Eventually, the major averages ended the session just off their best levels of the day. The Dow advanced 211.22 points or 0.8 percent to 25,928.68, the Nasdaq climbed 60.16 points or 0.8 percent to 7,729.32 and the S&P 500 rose 18.96 points or 0.7 percent at 2,834.40.

The major averages also moved notably higher for the week. While the Dow surged up by 1.7 percent, the S&P 500 and the Nasdaq jumped by 1.2 percent and 1.1 percent, respectively.

The continued strength on Wall Street came amid optimism about the ongoing trade talks between the U.S. and China.

In a post on Twitter this morning, Treasury Secretary Steven Mnuchin described the latest round of high-level U.S. trade talks as "constructive."

Mnuchin also said he looks forward to welcoming China's Vice Premier Liu He to continue the important discussions in Washington next week.

Optimism about the trade talks also contributed to a continued rebound by treasuries, with the yield on the benchmark ten-year note continuing to recover after ending Wednesday's trading at its lowest closing level since December of 2017.

On the U.S. economic front, a report released by the Commerce Department showed personal income in the U.S. increased by slightly less than anticipated in the month of February.

The report said personal income rose by 0.2 percent in February after edging down by 0.1 percent in January. Economists had expected personal income to climb by 0.3 percent.

Reflecting the continued impact of the recent government shutdown, the Commerce Department also released data on personal spending in January but not February.

Personal spending inched up by 0.1 percent in January after falling by 0.6 percent in December, while economists had expected spending to increase by 0.3 percent.

Meanwhile, a separate Commerce Department report showed a much bigger than expected increase in U.S. new home sales in the month of February.

The Commerce Department said new home sales surged up by 4.9 percent to an annual rate of 667,000 in February from the revised January rate of 636,000. Economists had expected new home sales to increase by about 1.3 percent.

With the increase in February, new home sales are at their high level since hitting a rate of 672,000 last March and up 0.6 percent compared to the same month a year ago.

Sector News

Computer hardware stocks turned in some of the market's best performances on the day, resulting in a 2.4 percent jump by the NYSE Arca Computer Hardware Index.

Significant strength was also visible among biotechnology stocks, with the NYSE Arca Biotechnology Index surging up by 2 percent.

Optimism about the U.S.-China trade talks also contributed to the considerable strength in the steel sector, as reflected by the 1.6 percent gain posted by the NYSE Arca Steel Index.

Semiconductor, healthcare, and software stocks also saw notable strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Friday. Japan's Nikkei 225 Index climbed by 0.8 percent, while China's Shanghai Composite Index soared by 3.2 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.6 percent, the German DAX Index advanced by 0.9 percent and the French CAC 40 Index jumped by 1 percent.

In the bond market, treasuries extended the modest pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.5 basis points to 2.414 percent.

Looking Ahead

Economic data is likely to be in focus next week, as the Labor Department is scheduled to release its closely watched monthly jobs report next Friday.

Reports on retail sales, durable goods orders, and manufacturing and service sector activity are also likely to attract some attention.

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