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* U.S., China to hold high-level talks in October
* Technology stocks boost; defensive sectors fall
* U.S. services sector growth rises; private jobs jump
* Indexes: Dow +1.52%, S&P 500 +1.33%, Nasdaq +1.63%
(Updates with investor comment, details, updates prices)
By Noel Randewich
Sept 5 (Reuters) - U.S. stocks surged on Thursday on
expectations of a de-escalation in trade tensions after
Washington and Beijing agreed to hold high-level talks next
month, while strong economic data eased fears of a domestic
slowdown.
After fears of a deepening trade war caused a sell-off in
late July and early August, leading to speculation that a
decade-long bull market was ending, the S&P 500 has largely
recovered and is now less than 2% short of its July 26 record
high close. The benchmark index has climbed 2.4% in the past two
sessions.
China and the United States agreed to hold talks in early
October in Washington, boosting markets as investors bet on a
thaw in the trade war between the world's two largest economies
that has taken a toll on global growth. Alternating signs of improvement and deterioration in the
U.S.-China trade war, often based on tweets and comments from
Trump, have repeatedly sparked volatility on Wall Street in
recent months.
"Whether the talks occur or not, we'll see. And whether they
are productive, we're skeptical. But the market loves it," said
Tim Ghriskey, Chief Investment Strategist at Inverness Counsel
in New York.
The S&P information technology index .SPLRCT rose 1.9%,
while financials .SPSY jumped 2.1%, both rising the most among
the 11 major S&P 500 sectors.
The interest rate-sensitive S&P 500 Banks Index .SPXBK
surged 2.9%, following a rise in U.S. Treasury yields. US/
The ADP (NASDAQ:ADP) National Employment Report, considered a precursor
to the Labor Department's more comprehensive jobs report, showed
U.S. private employers' payrolls grew at the fastest pace in
four months in August, led by big gains in service-sector jobs.
Another private survey showed growth in U.S. services
sectors accelerated in August, rebounding from its weakest level
in nearly three years, as new orders rose to their highest level
since February amid trade worries.
The upbeat reports eased concerns of an economic downturn,
which was exacerbated by data on Tuesday that showed a
contraction in U.S. factory activity in August. Investors will
keep a close watch on the crucial nonfarm payrolls data due on
Friday.
"Manufacturing is in a bit of a global slump, but if you
look at the other economic data, like the services and jobs
reports, none of them point to an economy that is teetering on a
recession," said Michael Antonelli, market strategist at Robert
W. Baird in Milwaukee.
At 2:16 p.m. ET, the Dow Jones Industrial Average .DJI was
up 1.52% at 26,756.37 points, while the S&P 500 .SPX gained
1.33% to 2,976.78.
The Nasdaq Composite .IXIC added 1.63% to 8,106.94.
In deal news, insurer Prudential Financial Inc (NYSE:PRU) PRU.N
agreed to acquire online insurance start-up Assurance IQ Inc for
$2.35 billion. Shares of Prudential (LON:PRU) fell 2.9%. Sectors viewed as defensive declined, with the S&P utilities
index .SPLRCU , real estate index .SPLRCR and consumer
staples index .SPLRCS all lower.
Advancing issues outnumbered declining ones on the NYSE by a
2.01-to-1 ratio; on Nasdaq, a 2.77-to-1 ratio favored advancers.
The S&P 500 posted 55 new 52-week highs and no new lows; the
Nasdaq Composite recorded 70 new highs and 38 new lows.
Markets indices https://tmsnrt.rs/2PYeCn0
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