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By Mark DeCambre, MarketWatch , Ryan Vlastelica

CA shares soar as chip giant Broadcom plans to buy software company for $19 billion

U.S. stocks jumped in afternoon trading on Thursday, as gains in internet and technology shares lifted the Nasdaq near record levels and helped to overshadow ongoing uncertainty over trade relations between the U.S. and China.

The day's gains were broad, with 10 of the 11 S&P 500 sectors higher on the day. However, the biggest boosts to Wall Street came from the information technology sector, which was up 1.6%. The industry lifted the Nasdaq-100 to a record and put the broader Nasdaq on track for a record close.

What are markets doing?

The Dow Jones Industrial Average rose 205 points, or 0.8%, to 24,906. The S&P 500 index gained 21 points, or 0.8%, to 2,794. The tech-centric Nasdaq Composite Index rose 87 points, or 1.1%, to 7,803, hitting an all-time high. The last time the Nasdaq closed at an all-time high was June 20, according to FactSet data.

All three were on track for their fifth rise of the past six sessions.

Tech stocks were among the biggest boosts to all three, with Microsoft Corp. (MSFT) up 2.1%, hitting a record, while Cisco Systems Inc. (CSCO) added 2%. Intel Corp. (INTC) was up 1.9% while Apple Inc. (AAPL) added 1.7%.

Boeing Co. (BA) and Caterpillar Inc. (CAT), considered the most sensitive to trade-war fears, were also higher on the day. Caterpillar was up 1.5% while Boeing gained 1.3%.

For the week, Dow is set to post a weekly gain of 1.9%, which would represent its best weekly win since the period ended June 8. The Nasdaq is eyeing a weekly advance of 1.5%, while the S&P 500 is on pace for a weekly return of 1.3%.

Read: Why stock investors may be disappointed by the coming earnings season (http://www.marketwatch.com/story/why-stock-investors-may-be-disappointed-by-the-coming-earnings-season-2018-07-12)

What is driving the market?

Recent trading in both directions has been driven by trade policy. Stocks dropped sharply on Wednesday after the Trump administration announced plans to impose another round of tariffs on Chinese goods. However, the mood turned positive on signs the U.S. and China are willing to resume trade talks, which could end up in a bilateral agreement. Bloomberg reported late Wednesday that officials from both countries have raised the prospects of restarting a conversation at a high level (https://www.bloomberg.com/news/articles/2018-07-11/u-s-china-trade-talks-said-to-stall-as-tariff-dispute-escalates).

Fears of a full-blown trade war possibly developing between the world's two largest economies have weighed on equities around the globe in recent months, although markets have remained somewhat resilient, with major indexes largely holding in a tight trading range.

Meanwhile, the U.S. consumer-price index increased 0.1% in June. Core CPI, minus volatile food and energy, rose 0.2% on the month. Moreover, the 12-month gain for CPI rose to a 6-yr high of 2.9% (http://www.marketwatch.com/story/consumer-inflation-hits-6-year-high-cpi-shows-2018-07-12), reflecting a U.S. economy that is running hotter than anytime since the 2007-09 recession.

A reading of weekly initial jobless claims showed a fall of 18,000 to 214,000 in first week of July, back toward the lowest levels in almost 50 years (http://www.marketwatch.com/story/jobless-claims-fall-18000-to-214000-around-july-4-holiday-back-near-49-year-low-2018-07-12).

Economists polled by MarketWatch expect consumer prices to have risen 0.2% month-on-month in June.

Renewed optimism, although tenuous at times in recent trading sessions, also comes as investors await the unofficial start of the second-quarter earnings season, with a number of significant banks, considered a bellwether for the economy, set to report Friday.

What are strategists saying?

"If you look at the Dow, it is up more than 500 points since Thursday's close. I think the market is really focusing on the fundamentals of the economy here in the U.S.," said Lindsey Bell, investment strategist at CFRA.

"Equity markets have bounced back today, as dealers are over the shock that the US is planning to impose tariffs on $200 billion worth of Chinese goods in August. Now that the dust has settled, traders have swooped in to take advantage of relatively cheap stocks, wrote David Madden, market analyst at CMC Markets UK in a Thursday note.

"The [CPI] reports point to an increase in demand, which is positive for the US economy. There is speculation the Federal Reserve will hike interest rates twice more this year, and a firm inflation rate will make monetary tightening more likely," he wrote.

What's on the economic calendar?

The Treasury Department is slated release its June figures on the federal budget for June at 2 p.m. Eastern.

See:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)

Stock movers

Shares in software company CA Inc.(CA) rallied 18% trade after chip giant Broadcom Inc.(AVGO) confirmed late Wednesday it has agreed to take over the software company (http://www.marketwatch.com/story/broadcom-confirms-189-billion-acquisition-of-ca-inc-2018-07-11) for $44.50 a share. Broadcom shares were down about 14.4%.

Shares of Wells Fargo & Co. (WFC) were flat those for JPMorgan Chase & Co. (JPM) were up 0.2%, while Citigroup Inc.'s stock (C) was up 0.7%. All three are set to report their results on Friday.

-- Sara Sjolin provided additional reporting

(END) Dow Jones Newswires

July 12, 2018 13:12 ET (17:12 GMT)

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