Health care and technology companies helped lift U.S. stocks higher Friday, breaking a three-day losing streak for the S&P 500 and giving the benchmark index its fifth-consecutive weekly gain.
The S&P 500 climbed 19.20 points, or 0.7 percent, to 2,803.69. That's the index's first close above 2,800 points since Nov. 8. The S&P has notched a weekly gain in nine of the past 10 weeks.
The Dow Jones industrial average rose 110.32 points, or 0.4 percent, to 26,026.32. The Nasdaq composite gained 62.82 points, or 0.8 percent, to 7,595.35. The Russell 2000 index of smaller companies picked up 14.09 points, or 0.9 percent, to 1,589.64. Major indexes in Europe also finished higher.
Renewed optimism for a potential resolution to the U.S.-China trade conflict helped put investors in a buying mood after a Bloomberg story saying U.S. officials are preparing a deal that could be signed within a month.
The trade war between the world's largest economies has raised prices for consumers and companies. It has also deepened concerns that escalating tariffs could worsen the global economy's slowdown.
Even so, investors' jitters over trade and signs of a slowing global economy have been eased by confidence in the prospects for steady U.S. growth and an increasingly hands-off Federal Reserve. That's fueled the market's strong start to this year following its steep sell-off at the end of 2018.
"Clearly, the tariffs negotiations are moving in the right direction, as far as the market is concerned, and that's positive," said Quincy Krosby, chief market strategist at Prudential Financial. "The other positive is that the Fed remains on hold ... and they have been telegraphing that they remain patient on interest rate hikes."
The U.S. stock indexes got off to a strong start early Friday, then lost ground after a report showed manufacturing growth slowed in February. But that pullback didn't last, a reflection of how traders have remained confident in the strength of the U.S. economy despite weak economic reports.
Consumer spending in December took its biggest tumble in nine years. Disappointing retail sales are another sign that growth slowed at the end of 2018.
Optimism over a potential U.S.-China trade deal marked a change from earlier in the week, when U.S. Trade Representative Robert Lighthizer raised doubts about progress in the talks. Speaking to lawmakers, Lighthizer said that much still needed to be done before the sides can reach an agreement over Beijing's technology strategy and other issues.
Washington accuses Beijing of stealing foreign companies' technology or pressuring them to hand it over. President Donald Trump has held off on a threat to impose higher tariffs on $200 billion of Chinese products as negotiations continue.
While the market's recent gains already reflect investors' optimism for a U.S.-China trade deal, stocks could get a further boost from an official resolution to the dispute, said Eric Wiegand, senior portfolio manager for Private Wealth Management at U.S. Bank.
"If we were able to see a successful conclusion to the negotiations that could be a near-term catalyst," he said.
Health care and technology companies accounted for much of the market's gains Friday. Celgene rose 3.4 percent, while Western Digital gained 2.7 percent.
A mix of company earnings and deal news also caught investors' attention Friday.
Business on 03/02/2019