Wall Street rises on hopes of U.S.-China trade deal

By Shreyashi Sanyal

(Reuters) - U.S. stocks rose in early afternoon trading on Thursday on hopes that top-level U.S.-China trade talks would yield at least a partial deal, while a rise in Apple's shares lifted the technology sector.

Wall Street's main indexes moved higher after President Donald Trump tweeted he would meet Chinese Vice Premier Liu He on Friday for further trade talks.

"The tweet ... is giving market participants a reason to believe that perhaps a trade deal or at least a partial deal might be announced as early as tomorrow," said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.

Separately, Liu said Beijing was willing to reach an agreement with Washington to prevent any further escalation in the trade war, Chinese state news agency Xinhua reported.

A senior U.S. Chamber of Commerce official said U.S. and Chinese negotiators were working towards an "early harvest" of confidence-building agreements, including one to avoid currency manipulation.

"Some sort of agreement towards currency is fine, but it would not get us anywhere near from where we started this issue," Pavlik said.

The latest comments fueled optimism that had been dulled earlier after China urged the United States to stop unreasonable pressure on Chinese companies, while the South China Morning Post reported that the two sides made no progress in deputy-level trade talks earlier in the week.

However, the three main indexes were off their session highs, with some analysts pointing to a sense of caution among investors.

"There is just too much pessimism overall. Investors know that we are not going to get a proper deal, but are still looking for some bit of good news to digest," said Jason Browne, president at Alexis Investment Partners LLC in Bethlehem, Pennsylvania.

Stock markets have been rankled by weak economic indicators showing a contraction in U.S. manufacturing and a bleak reading on business activity, bolstering bets of another interest rate cut by the Federal Reserve to combat a slowdown.

Data on Thursday showed U.S. consumer prices were unchanged in September, while underlying inflation retreated.

Apple Inc rose 1.2%, lifting the technology sector by 0.6%, after Longbow Research upgraded the company's stock to "buy", citing higher iPhone 11 demand.

Apple suppliers Skyworks Solutions Inc and Qorvo Inc gained 4.3% and 4.4%, respectively, after Cowen and Co upgraded its rating on both the companies, expecting them to benefit from higher iPhone demand.

At 12:43 p.m. ET the Dow Jones Industrial Average was up 135.10 points, or 0.51%, at 26,481.11, the S&P 500 was up 17.75 points, or 0.61%, at 2,937.15 and the Nasdaq Composite was up 41.08 points, or 0.52%, at 7,944.83.

Among other stocks, Delta Air Lines Inc fell 2.8%, the most on the S&P 500, after the carrier forecast disappointing current-quarter profit.

Cisco Systems Inc dropped 2%, after a report that Goldman Sachs downgraded the network gear maker's shares to "neutral".

Advancing issues outnumbered decliners for a 1.80-to-1 ratio on the NYSE and a 1.47-to-1 ratio on the Nasdaq.

The S&P index recorded five new 52-week highs and four new lows, while the Nasdaq recorded 10 new highs and 91 new lows.

(Reporting by Shreyashi Sanyal and Medha Singh in Bengaluru; Editing by Shounak Dasgupta)