In the latest wild swing for stocks the Dow surged midday as China and the U.S. prepare to hold their first trade discussions in months, a potential sign of progress toward ending the trade war between them.
Traders saw a glimmer of hope of an easing in the trade battle that has seen the two sides hit each other with reciprocal tariffs on goods worth $34 billion.
"The threat of a trade war threatens economic activity", said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. "The fact that the administration might resolve (trade disputes) sooner rather than later, without a sustained time frame of slower economic actively due to tariffs, that bodes well for the market".
Bond prices fell. The yield on the 10-year Treasury rose to 2.86 percent.
A 2.9 percent drop in Caterpillar and a 1.4 percent slide in Boeing weighed on the Dow Jones Industrial Average. The S&P 500 industrial sector gained 1.2 per cent.
Following bleak forecasts, shares of Nvidia Corp (NVDA.O) and Applied Materials Inc (AMAT.O) fell 4.9 percent and 7.7 percent, respectively, pushing the Philadelphia SE Semiconductor index.SOX 0.7 percent lower.
The S&P 500, meanwhile, added 27.44 points, or 0.97% to 2,845.58 on track for its biggest gain since June 1 just a day after its biggest loss in six weeks. In addition to Apple and Netflix, the FAANG group includes Facebook Inc (FB.O), Amazon.com (AMZN.O) and Google parent Alphabet Inc (GOOGL.O).
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At 9:53 a.m. EDT the Dow Jones Industrial Average was down 217.85 points, or 0.86 percent, at 25,082.07, the S&P 500 was down 22.52 points, or 0.79 percent, at 2,817.44 and the Nasdaq Composite was down 61.79 points, or 0.79 percent, at 7,809.10.
U.S. stocks had rebounded on Thursday with the Dow posting its biggest percentage gain in over four months, as positive earnings and waning trade jitters buoyed investor confidence. The S&P 500 posted 33 new 52-week highs and four new lows; the Nasdaq Composite recorded 91 new highs and 69 new lows.
Ten of the 11 major S&P sectors were higher, with only the defensive utilities sector in the red.
Second-quarter earnings have been stronger than expected, with 79.3 percent of the 463 S&P 500 that have reported so far beating analyst expectations, according to Thomson Reuters I/B/E/S.
Advancing issues outnumbered decliners by a 4.13-to-1 ratio on the NYSE and by a 2.47-to-1 ratio on the Nasdaq.
Volume on U.S. exchanges was 6.39 billion shares, compared with the 6.53 billion-share average for the full session over the last 20 trading days.