Stocks surge as US and China plan trade talks; hiring climbs

Global stocks are jumping Friday as investors welcomed news of trade talks between the U.S. and China next week and the U.S. government reported a big increase in hiring in December. The Dow Jones Industrial Average soared about 500 points.

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China's Commerce Ministry said the talks will be held Monday and Tuesday in Beijing and market watchers are once again hoping for signs the world's largest economic powers will make progress toward resolving their dispute. The trade tensions have dragged on for nearly a year and uncertainty over their outcome has dragged down stock indexes around the world.

Meanwhile the Labor Department said U.S. employers added 312,000 jobs last month, a far stronger result than experts had anticipated. U.S. stocks have tumbled over the last three months as investors worried that the economy might slow down dramatically because of a variety of challenges including the trade dispute and rising interest rates. Some analysts said investors were acting as if a recession was on the horizon, despite a lack of evidence that the U.S. economy is struggling.

"It's hard to square recession worries with the strongest job growth we've seen in years," said Alec Young, managing director of global markets research for FTSE Russell. "The strong December jobs report is a net positive for stocks because investors' biggest concern has been slowing growth."

The S&P 500 index climbed 53 points, or 2.2 percent, to 2,501 at 10:05 a.m. Eastern time. The Dow gained 498 points, or 2.2 percent, to 23,185. The Nasdaq composite jumped 158 points, or 2.4 percent, to 6,621.

The U.S. and China have raised tariffs on billions of dollars of each other's goods in a fight over issues including Beijing's technology policy, which Washington alleges is predatory. Last month, President Donald Trump and Chinese leader Xi Jinping agreed to 90-day ceasefire as a step toward defusing tensions.

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Technology companies, banks, health care and industrial companies all made strong gains. Microsoft rose 3.1 percent to $100.41 and Deere gained 3.4 percent to $148.96. Retailers and internet companies rose as well, with Amazon up 2.4 percent at $1,536 and Google's parent company, Alphabet, rising 2.3 percent to $1,048. Most of the companies in those industries stand to do better in times of faster economic growth.

Stocks in the U.S. were on track to regain most of Thursday's losses. The S&P 500 fell 2.5 percent after Apple said iPhone sales in China are falling and a survey suggested U.S. factories grew at a weaker pace. Technology companies took their biggest losses in seven years.

Bond prices also changed course and moved sharply lower. The yield on the 10-year Treasury note rose to 2.65 percent after it plunged to 2.55 percent Thursday, its lowest in almost a year. That helps banks, as higher interest rates allow them to make bigger profits on mortgages and other loans.

European shares recouped losses from a day earlier, with Germany's DAX gaining 2.5 percent and France's CAC 40 rising 2 percent. Britain's FTSE 100 advanced 1.8 percent.

In Asia, Hong Kong'ss Hang Seng jumped 2.2 percent. South Korea's Kospi added 0.8 percent. Japan's Nikkei 225 index fell 2.3 percent on its first daty of trading in 2019 as technology and electronics makers slumped on Apple's report that Chinese iPhone sales were slipping.

Traders cheered a private survey released Friday showing that China's services sector expanded in December at a six-month high. It came on the back of weak Chinese manufacturing data earlier in the week.

U.S. crude oil surged 3.3 percent to $48.63 a barrel in New York. Brent crude, used to price international oils, was up 2.3 percent to $57.83 per barrel in London.

The dollar strengthened. It rose to 108.47 yen from 107.77 yen. The euro fell to $1.1352 from $1.1391. The British pound slipped to $1.2628 from $1.2630.

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Associated Press Writer Annabelle Liang contributed to this story from Singapore.

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