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By Mark DeCambre, MarketWatch , Sunny Oh

Fed to buy $60 bln Treasury bills per month into 2020

U.S. stocks surged Friday as investors turned hopeful about the outcome of a second day of trade talks between the U.S. and China, with President Trump set to meet China's Vice Premier Liu He later Friday.

How did the benchmarks perform?

The Dow Jones Industrial Average rose 428 points, or 1.6%, to 26,925, the S&P 500 index advanced 49 points, or 1.7%, to 2,986, while Nasdaq Composite Index gained 147 points, or 1.8%, to 8,097.

On Thursday (http://www.marketwatch.com/story/us-stock-index-futures-drift-lower-as-beijing-washington-tariff-talks-take-focus-2019-10-10), the Dow rose 150.66 points, or 0.6%, to 26,496.67. The S&P 500 index climbed 0.6%, or 18.73 points, to 2,938.13. The Nasdaq picked up 47.04 points, or 0.6%, to finish at 7,950.78.

For the week, the Dow is poised to rise 1.3%, while the S&P 500 and Nasdaq are on pace to post 1.1% and 1.4% rise, respectively.

What drove the stock market?

(http://www.marketwatch.com/story/trump-says-hell-meet-with-chinese-vice-premier-on-friday-2019-10-10)President Donald Trump tweeted that 'good things are happening (https://twitter.com/realDonaldTrump/status/1182654371714211840)' at the trade negotiations.

(http://twitter.com/realDonaldTrump/status/1182654371714211840)

He is expected to meet China's Vice Premier Liu He later Friday. The Wall Street Journal reported (https://www.wsj.com/articles/trump-to-meet-with-china-s-top-trade-negotiator-on-friday-11570716458?mod=article_inline)that terms for a possible tentative deal could include China offering more agriculture purchases, a joint pact to deter Beijing from devaluing its currency, and, on the U.S. side, suspending planned tariffs and relaxing export bans against blacklisted Chinese telecom giant Huawei Technologies Co. (http://www.marketwatch.com/story/trump-says-hell-meet-with-chinese-vice-premier-on-friday-2019-10-10)

China overnight Friday set a timetable for opening its finance industries (https://www.apnews.com/3e0a248000c64959abd24916f2de6953). The China Securities Regulatory Commission said Friday overseas financial service companies in futures, securities and mutual funds will be able to apply for total control of onshore ventures starting in 2020. The move came as the country speeds up its financial markets opening.

"The whole U.S.-China trade negotiations have been a cloud over the markets in the last few weeks. If this partial breakthrough comes to fruition, it will give at least a temporary boost to the markets, and we're seeing that reflected in stocks this morning," said Michael Arone, chief investment strategist for State Street Global Advisors, in an interview with MarketWatch. "There seems to be relief that there will some type of progress on these discussions. The biggest positive that could come as a result of the negotiations is a freeze on new U.S. tariffs set to take place in a couple of days," he said.

On the data front, University of Michigan's preliminary consumer sentiment report came in at 96 , above economists' estimates for a reading of 92, according to Econoday. Meanwhile, the import price index (http://www.marketwatch.com/story/import-inflation-climbs-in-september-on-higher-cost-of-oil-but-most-prices-still-tame-2019-10-11)climbed 0.2% last month, the government said Friday. The cost of goods imported into the U.S. rose in September for the first time in four months, but most of the increase stemmed from higher oil prices.

The Federal Reserve announced that it would buy $60 billion of Treasury bills every month (http://www.marketwatch.com/story/fed-says-it-will-start-to-buy-treasury-bills-next-week-to-ease-money-market-pressure-2019-10-11-1191242) at least into the second-quarter, starting from next week. The central bank also said it would conduct overnight repurchase agreements at least through January of next year in order to reduce pressures in funding markets.

Investors also will watch for comments from Boston Fed President Eric Rosengren (https://www.bostonfed.org/news-and-events/press-releases/2019/statement-of-eric-s-rosengren.aspx) -- one of three dissenters in the Fed's last decision -- set to speak at the American Economic Challenges Symposium in Madison, Wis., at 1:15 p.m., while Dallas Fed President Robert Kaplan, is expected to moderate a panel in San Francisco at 3 p.m. Kaplan isn't a voting member of the rate-setting Federal Open Market Committee.

See also: Bank stocks surge as U.S.-China trade hopes lift Treasury yields (http://www.marketwatch.com/story/bank-stocks-surge-as-us-china-trade-hopes-lift-treasury-yields-2019-10-11)

Which stocks are in focus?

Shares of Apple Inc.(AAPL) advanced 1.7% as analysts at Wedbush raised its stock price target to $265 from $245. If the stock closes above $232.07, it will set a new all-time high.

The stock for Voxx International Corp.(VOXX) fell 3.3% even after the technology manufacturer reported that its operating losses fell in the first half of the year.

Shares of Bed Bath & Beyond(BBBY) rose 5.4% after it named Target Corp.'s(TGT) head of merchandising as its new chief executive.

How did other assets trade?

The yield on the 10-year U.S. Treasury note climbed to 1.739%, compared with 1.649% on Thursday.

(http://www.marketwatch.com/story/gold-edges-higher-ahead-of-trade-talks-2019-10-09)Gold futures held below the psychologically significant level at $1,500. December gold was most recently down 1.2% at $1,482.30 an ounce.

West Texas Intermediate crude for November delivery jumped 83 cents to $54.37 a barrel on the New York Mercantile Exchange, after an oil tanker attack in the Middle East (http://www.marketwatch.com/story/oil-prices-jump-after-reports-of-iranian-tanker-blast-2019-10-11).

In Asia overnight Friday, Hong Kong's Hang Seng Index surged 2.3% to 26,308.44, the China CSI 300 rose 1% to reach 3,911.73, and Japan's Nikkei 225gained 1.2% to 21,798.87. The Stoxx Europe 600, meanwhile, advanced 1.6% to 388.91. And the FTSE 100 gained 0.3% to 7,186.36, even as the pound jumped 1.8% against the dollar, amid renewed Brexit optimism (http://www.marketwatch.com/story/uk-stocks-drift-before-trade-talks-as-gdp-edges-lower-in-august-2019-10-10).

(END) Dow Jones Newswires

October 11, 2019 11:40 ET (15:40 GMT)

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