By Riva Gold 

Signs of easing trade tensions between the U.S. and China continued to push stocks higher Friday, putting most major indexes on track to end the week with gains.

The Dow Jones Industrial Average, the S&P 500 and the Nasdaq all rose about 0.6% shortly after markets opened in the U.S.

Benchmarks in Europe, Japan, Shanghai and Hong Kong all climbed over 1%.

The moves came after U.S. stocks rose for a third straight session Thursday thanks to optimism the U.S. would ratchet back tariffs on Chinese imports. The Wall Street Journal reported Thursday that U.S. Treasury Secretary Steven Mnuchin proposed the idea of lifting some or all tariffs on Chinese imports to advance trade talks.

A Treasury spokesman said bargaining positions "are all at the discussion stage" and that "neither Secretary Mnuchin nor Ambassador Lighthizer has made any recommendations to anyone with respect to tariffs or other parts of the negotiation with China."

Trade friction had weighed down market sentiment in recent months amid concerns about the impact it would have on economic growth and corporate supply chains. A Federal Reserve report this week showed firms said they were struggling with higher input prices, in part due to tariffs.

Kevin Gardiner, global investment strategist at Rothschild Wealth Management, said that while longer term it is less clear whether the outcome of the trade negotiations might be good or bad for the U.S. economy, "anything which makes international trade more difficult, that puts sand in the wheels of businesses and disrupts their increasingly global supply chains has got to be bad for business."

In Europe, the trade-sensitive auto sector was one of the best performers Friday, rising 2.3% for the day and adding to gains of 8.7% this month after a bruising selloff in late 2018.

Shares of oil-and-gas companies also rose 2% Friday as Brent crude, the global benchmark, added 1.2% to $61.90 a barrel.

The broader Europe 600 was up 1.6% in afternoon trading, around a six-week high and on track for weekly gains alongside its peers in the U.S. and Asia.

The U.K.'s multinational-heavy FTSE 100 lagged behind for the week amid a strengthening currency and ongoing uncertainty around Brexit.

Hong Kong's Hang Seng rose 1.3% Friday amid solid gains in shares of health care companies, while Japan's Nikkei Stock Average added 1.3%.

Corporate earnings have also been a source of support for the market this week and continued to drive moves in individual companies on Friday.

In Europe, shares of Europe's Ryanair Holdings fell 1.7% after it lowered its full-year profit guidance and said further cuts could be on the way depending on how Brexit develops.

Rio Tinto was up 1.1% after the mining giant forecast a further rise in exports in the year ahead.

In the U.S., shares of SunTrust Banks led gains in premarket trading, rising 4.9% after it reported an increase in revenue and a drop in costs.

Shares of Netflix fell 3% after the streaming-video giant said revenue grew less than analysts expected, while American Express moved 2.2% lower despite posting its highest annual profit and revenue.

Overall, slightly more companies than usual have been beating analysts' earnings estimates so far for the fourth quarter, according to data from Refinitiv.

That comes against a significantly lowered bar, however, following steep downgrades to fourth-quarter and 2019 earnings forecasts in recent weeks.

"Analysts' [earnings] revision momentum has gone off a cliff," said David Bowers, who heads up research at Absolute Strategy Research. For stocks and the broader environment for risky assets "we think we're not out of the woods yet," he said.

Write to Riva Gold at riva.gold@wsj.com

 

(END) Dow Jones Newswires

January 18, 2019 09:50 ET (14:50 GMT)

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