After moving notably higher early in the session, stocks have seen further upside over the course of the trading day on Friday. With the upward move, the major averages are adding to the gains posted in the previous sessions.
In recent trading, the major averages have reached new highs for the session. The Dow is up 331.51 points or 1.4 percent at 24,701.61, the Nasdaq is up 90.79 points or 1.3 percent at 7,175.25 and the S&P 500 is up 36.23 points or 1.4 percent at 2,672.19.
The continued strength on Wall Street comes as traders continue to express optimism about trade talks between the U.S. and China.
Adding to the positive sentiment, a report from Bloomberg News said China has offered to go on a six-year buying spree to ramp up imports from the U.S.
An official familiar with the negotiations told Bloomberg that China would seek to reduce its trade surplus with the U.S. by increasing annual goods imports by a combined value of more than $1 trillion.
The Bloomberg report comes on the heels of yesterday's Wall Street Journal report indicating the U.S. is considering lifting tariffs on Chinese goods.
The Wall Street Journal report on Thursday said the U.S. is weighing easing tariffs in an effort to calm markets and give China an incentive to make deeper concessions.
People close to internal deliberations told the Journal that Treasury Secretary Steven Mnuchin proposed the idea of lifting some or all tariffs in a series of strategy meetings.
The people said the aim of easing the tariffs is to advance trade talks and win China's support for longer-term reforms.
The positive news on trade has overshadowed a report from the University of Michigan showing a substantial deterioration in U.S. consumer sentiment in the month of January.
The preliminary report said the consumer sentiment index plummeted to 90.7 in January from the final December reading of 98.3. Economists had expected the index to dip to 97.0.
With the much steeper than expected drop, the consumer sentiment index tumbled to its lowest level since hitting 87.2 in October of 2016.
"Consumer sentiment declined in early January to its lowest level since Trump was elected," said Surveys of Consumers chief economist Richard Curtin. "The decline was primarily focused on prospects for the domestic economy, with the year-ahead outlook for the national economy judged the worst since mid 2014."
He added, "The loss was due to a host of issues including the partial government shutdown, the impact of tariffs, instabilities in financial markets, the global slowdown, and the lack of clarity about monetary policies."
Meanwhile, a separate report from the Federal Reserve showed industrial production increased by slightly more than expected in December, as jumps in manufacturing and mining output more than offset a sharp pullback in utilities output.
The Fed said industrial production rose by 0.3 percent in December after climbing by a downwardly revised 0.4 percent in November.
Economists had expected industrial production to edge up by 0.2 percent compared to the 0.6 percent advance originally reported for the previous month.
Sector News
Oil service stocks have moved sharply higher over the course of the trading session, driving the Philadelphia Oil Service Index up by 3.3 percent to its best intraday level in well over a month.
The rally by oil service stocks comes amid a significant increase by the price of crude oil, with crude for February delivery surging up $1.52 to $53.59 a barrel.
Substantial strength has also emerged among semiconductor stocks, as reflected by the 2.9 percent jump by the Philadelphia Semiconductor Index. The index has also reached a one-month intraday high.
Transportation stocks also continue to turn in a strong performance in mid-day trading, resulting in a 2.7 percent spike by the Dow Jones Transportation Average.
Trucking company J.B. Hunt Transport Services (JBHT) is posting a standout gain after reporting better than expected fourth quarter results.
Computer hardware, chemical, financial and networking stocks have also moved notably higher, reflecting broad based buying interest.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Friday. Japan's Nikkei 225 Index surged up by 1.3 percent, while Hong Kong's Hang Seng Index jumped by 1.3 percent.
The major European markets also showed strong moves to the upside on the day. While the German DAX Index spiked by 2.6 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index shot up by 2 percent and 1.7 percent, respectively.
In the bond market, treasuries have moved notably lower amid the rally on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.4 basis points at 2.793 percent.
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