Global stock rally builds after US-China trade talks

NEW YORK (AP) — U.S. stocks are on the verge of their fourth consecutive gain Wednesday as stocks around the world build on their early 2019 rally. Negotiators from the U.S. and China extended their trade talks to a third day, which investors took as a sign the discussions were productive even though no major breakthroughs have been announced. Oil prices also continued to climb and stocks linked to faster economic growth, such as technology companies, kept rising.

KEEPING SCORE: The S&P 500 index climbed 13 points, or 0.5 percent, to 2,587 as of 3 p.m. Eastern time. The Dow Jones Industrial Average picked up 125 points, or 0.5 percent, to 23,912. The Nasdaq composite rose 67 points, or 1 percent, to 6,964. The Russell 2000 index of smaller and U.S.-focused stocks added 13 points, or 0.9 percent, to 1,439.

The S&P 500 hasn't had a four-day winning streak since mid-September.

Indexes in Europe also rose. Germany's DAX and the French CAC 40 each added 0.8 percent and Britain's FTSE 100 gained 0.7 percent. Asian stocks made bigger gains. Japan's Nikkei 225 gained 1.1 percent and the Hang Seng in Hong Kong rallied 2.3 percent. South Korea's Kospi advanced 1.9 percent.

WHAT THE FED SAID: During the Federal Reserve's meeting in December, officials said volatile stock markets, trade tensions and uncertain global growth made their path for future interest rate hikes "less clear." The Fed officials felt they could be "patient" about raising rates in the future.

Chairman Jerome Powell and other Fed officials have emphasized recently that they will take a careful approach to interest rates and the Fed's gigantic but slowly-shrinking portfolio of government bonds. That's been a relief to investors, who worried last fall that the Fed would raise rates too quickly and that their actions would hinder economic growth.

CHINA-US TRADE: The latest round of trade negotiations between the world's two largest economic powers have now concluded, but investors were cheered when they learned the two-day talks would be extended by a day. No details were immediately announced.

The Trump administration wants the government of President Xi Jinping to alter its handling of technology held by foreign companies, and change plans for the creation of Chinese leaders in advanced technologies. Chinese officials have suggested they could revise some of their industrial plans but won't abandon larger goals that they consider a path to prosperity and global influence.

THE QUOTE: U.S. Bank Wealth Management chief equity strategist Terry Sandven said stocks could keep rising next week as U.S. corporations start to report their fourth-quarter results, as their profits are expected to rise compared to last year.

"You still have moderating earnings growth, non-problematic inflation and relatively low interest rates," he said.

But like most experts, Sandven doubts it will be a smooth ride because investors will be very sensitive to trade threats and signs of slower growth.

"We're in this roller-coaster mode," he said. "We're in a trading range that we'll be in for the course of the year."

TECH ON TOP: Chipmakers made some of the largest gains, as Micron Technology surged 5.6 percent to $35.93 and Broadcom climbed 3.7 percent to $244.77. The Philadelphia Semiconductor index sank 25 percent from early June to late December as investors worried about an abrupt slowdown in the global economy as well as the possibility that demand was falling and supplies were too large.

Other tech stocks also jumped. Microsoft gained 1.4 percent to $104.24 and Apple picked up 1.9 percent to $153.52.

GONNA NEED THAT DRINK: Beer and wine maker Constellation Brands slumped after it cut its annual profit forecast, saying it now expects sales and profits for its wine and spirits division to fall in the current fiscal year. The stock gave up 11.2 percent to $153.08.

The Corona maker also said it wrote down the value of its $4 billion investment in Canadian marijuana producer Canopy Growth by $164 million. Pot stocks proved popular as Canada legalized recreational marijuana and companies like Constellation and Altria announced partnerships with growers. But the stocks have been extremely volatile. Canopy stock rose in 2018 but has lost almost half its value since mid-October. On Wednesday it climbed 11.9 percent to $33.12.

ENERGY: Oil prices hit their highest in almost a month after rising for the ninth day in the last 10. U.S. crude rose 5.2 percent to $52.36 a barrel in New York. It's jumped 15 percent so far in 2019. Brent crude, used to price international oils, added 4.6 percent to $61.44 a barrel in London.

Wholesale gasoline rose 4.6 percent to $1.43 a gallon and heating oil added 2.9 percent to $1.88 a gallon. Natural gas edged up 0.6 percent to $2.98 per 1,000 cubic feet.

HOMEBUILDER BOUNCE: Lennar jumped 7.1 percent to $45.92 and other homebuilders also rose after CEO Stuart Miller said more potential buyers have been coming to Lennar's model homes recently as mortgage rates dipped. That could be a sign sales will pick up.

Homebuilder stocks took huge losses in 2018 as high prices and increasing mortgage rates hurt sales.

BONDS: Bond prices continued to fall. That sent yields higher, a sign investors expect more economic growth and higher long-term interest rates. The yield on the 10-year Treasury note rose to 2.73 percent from 2.71 percent.

METALS: Gold rose 0.5 percent to $1,292 an ounce. Silver inched up 0.1 percent to $15.74 an ounce and copper was unchanged at $2.66 a pound.

CURRENCIES: The dollar slipped to 108.14 yen from 108.65 yen. The euro climbed to $1.1541 from $1.1443.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP