Stocks veer back upward on hopes for US-China trade talks

NEW YORK (AP) — Stock markets around the world jumped Tuesday on hopes that trade tensions between the world's largest economies may ease after U.S. and Chinese officials spoke on the phone.

The S&P 500 index jumped more than 1 percent at the start of trading, following even bigger gains in Europe. It's the latest big swing for stocks, which have been mostly falling since late September on worries about the global trade war, rising interest rates and a slowing economy.

But even within a single day, stocks have changed direction sharply in recent weeks.

KEEPING SCORE: The S&P 500 was up 19 points, or 0.7 percent, at 2,656 as of 11 a.m. Eastern time. The gains were broad. Four stocks rose for every one that fell on the New York Stock Exchange. Ten of the 11 sectors that make up the S&P 500 were up, with raw-material producers and technology companies leading the way. The only sector to fall was utilities, which investors favor when they want to reduce risk.

The Dow Jones industrial average jumped 123, or 0.5 percent, to 24,547, and the Nasdaq composite rose 60, or 0.9 percent, to 7,081.

U.S.-CHINA RELATIONS: U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He have spoken by phone about "the promotion of the next economic and trade consultations," a statement by China's Commerce Ministry said Tuesday.

That raised hopes that the two countries can make progress on their trade dispute. Investors worry weaker global trade would dent economic growth around the world and corporate profits. The tensions have waxed and waned repeatedly this year, which has helped make the stock market particularly volatile recently.

Another flashpoint for the two countries is the detention of Meng Wanzhou, the chief financial officer of Chinese telecommunications giant Huawei, in Canada. Meng is wanted in the U.S. for allegedly misleading banks about the company's business dealings in Iran. China has protested her arrest.

ANALYST'S TAKE: "We're now seeing daily commentary it seems about the progress of talks between the U.S. and China but the reality is that this is going to be a process that moves at a glacial pace but the fact that talks are happening are a reason to be optimistic," said Craig Erlam, senior market analyst at OANDA.

MARKETS OVERSEAS: In Europe, Germany's DAX was up 2.2 percent, and France's CAC 40 was up 2 percent. Britain's FTSE 100 was up 1.8 percent.

In Asia, Japan's Nikkei 225 lost 0.3 percent, South Korea's Kospi fell less than 0.1 percent to 2,052.97 and Hong Kong's Hang Seng edged up 0.1 percent.

BUYBACK BOOST: Bank of New York Mellon and Jazz Pharmaceuticals both rose more than 2 percent after announcing increased programs to buy back their own stock. Shareholders often like these purchases because they can goose a company's earnings per share, one of their main measures for success.

Bank of New York Mellon said it would increase its repurchase program by up to $830 million, and its shares rose 2.4 percent to $48.70. Jazz Pharmaceuticals said its board approved an increase of $400 million, and its stock gained 2.4 percent to $142.99.

YIELDS: The yield on the 10-year Treasury rose to 2.86 percent from 2.85 percent late Monday, while the two-year yield held steady at 2.73 percent.

The gap between those two yields has been shrinking this year, which has worried some investors. When the 10-year yield falls below the two-year yield, investors call it an "inverted yield curve" and see it as a precursor to a recession.

COMMODITIES: Benchmark U.S. crude oil jumped $1.28, or 2.5 percent, to $52.28 per barrel. Brent crude, the international standard, gained 98 cents to $60.95.

Gold slipped 50 cents to $1,248.90 per ounce.

CURRENCIES: The dollar rose to 113.30 Japanese yen from 113.21 yen late Monday. The euro slipped to $1.1324 from $1.1353, and the British pound rose to $1.2560 from $1.2557.