(Reuters) – Wall Street’s main indexes rose on Friday, with the S&P 500 set to post its best quarterly performance in nine and a half years, on renewed trade optimism as the latest round of U.S.-China talks ended on a positive note.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., March 22, 2019. REUTERS/Brendan McDermid

Friday is the last trading day of the first quarter and the benchmark index has risen 12.7 percent so far, its biggest quarterly gain since September 2009.

U.S. Treasury Secretary Steven Mnuchin said he held “constructive” talks in Beijing, concluding the latest round of dialogue, which will be followed by a round in Washington next week.

Meanwhile, Chinese state news agency reported that the two sides discussed “relevant agreement documents” and made new progress on trade.

Trade-sensitive industrials rose 0.74 percent, while chipmakers, which have a large revenue exposure to China, also gained.

The Philadelphia Semiconductor Index climbed 1.30 percent, while the broader technology index rose 0.50 percent.

“It has been a surprisingly strong quarter. People are feeling much better than they were in the beginning of the first quarter and that’s a positive sign, there are still some concerns like trade and the inverted yield curve,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.

“If you get a deal on trade, investors will start to feel better and that’s one concern that goes away, and maybe earnings will start to improve from the second quarter this year.”

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. [US/]

The yield curve between three-month bills and 10-year notes turned slightly positive on Friday, after remaining inverted for a week. This helped financials rise 0.46 percent, and the S&P banking index gain 0.40 percent.

At 9:48 a.m. ET the Dow Jones Industrial Average was up 86.34 points, or 0.34 percent, at 25,803.80. The S&P 500 was up 10.34 points, or 0.37 percent, at 2,825.78 and the Nasdaq Composite was up 35.69 points, or 0.47 percent, at 7,704.86.

U.S. consumer spending rebounded less than expected in January and incomes rose modestly in February, suggesting the economy was fast losing momentum after growth slowed in the fourth quarter.

Energy stocks added 0.9 percent, the most among S&P sectors trading higher, helped by a rise in oil prices. [O/R]

Only the defensive utilities and real estate sectors fell.

A highly anticipated initial public offering of a ride-hailing startup Lyft Inc, is set to start trading on the Nasdaq at about 10:45 a.m. ET.

DowDuPont fell 1.5 percent after brokerages lowered their price targets on the chemical company, citing bad weather and margin pressures.

Celgene Corp jumped 7.5 percent, after proxy advisory firm Institutional Shareholder Services backed rival drugmaker Bristol-Myers Squibb Co’s vote in favor of proposed takeover of the company.

Advancing issues outnumbered decliners by a 2.87-to-1 ratio on the NYSE and by a 2.10-to-1 ratio on the Nasdaq.

The S&P index recorded 26 new 52-week highs and no new low, while the Nasdaq recorded 25 new highs and 12 new lows.

Reporting by Shreyashi Sanyal and Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur


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