Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average ended sharply higher as President Donald Trump said the U.S. had "a substantial phase one deal with China" in the lengthy trade war between the world's two largest economies.
  • Apple (AAPL - Get Report) climbed after the tech giant removed a controversial app from its App store linked to the Hong Kong protests and traders bet that progress in U.S.-China trade talks could spur smartphone demand.
  • Bank stocks advanced on positive trade talk and reports of a breakthrough in Brexit negotiations, with JPMorgan Chase (JPM - Get Report) , Citigroup  (C - Get Report)  and Bank of America (BAC - Get Report) all advancing.

Wall Street Overview

Stocks ended sharply higher Friday as President Donald Trump said the U.S. had "a substantial phase one deal with China" in the lengthy trade war between the world's two largest economies and delayed tariff increases set to go into effect next week.

The Dow Jones Industrial Average, which rose as much as 519 points, gave back some of its gains at the close to finish up 319, or 1.21%, to 26,816. The S&P 500 advanced 1.09% and the Nasdaq climbed 1.34%.

Caterpillar (CAT - Get Report) , 3M (MMM - Get Report)  and Goldman Sachs (GS - Get Report) were some of the Dow's biggest winners.

Recreational-vehicle companies in particular got a boost from the lessening trade tensions. For example, Camping World Holdings (CWH - Get Report) was up more than 10% on the day, while Thor Industries (THO - Get Report) added almost 5%.

Under the first phase, China will purchase between $40 billion and $50 billion in U.S. agricultural products. Trump said the deal includes agreements on foreign-exchange issues with China. In exchange, the U.S. agreed to hold off on tariff hikes on $250 billion worth of China-made goods that were set to take effect Tuesday.

Trump said "Phase two will start almost immediately" after the first phase is signed.

U.S. Trade Representative Robert Lighthizer said a decision had not been made regarding U.S. tariffs scheduled for December.

The announcement followed Trump's meeting with China's Vice Premier Liu He. He had told reporters on Thursday that the talks were going well and he repeated his message on Twitter earlier on Friday.

"Good things are happening at China Trade Talk Meeting," he wrote. "Warmer feelings than in recent past, more like the Old Days. I will be meeting with the Vice Premier today. All would like to see something significant happen!"

Good things are happening at China Trade Talk Meeting. Warmer feelings than in recent past, more like the Old Days. I will be meeting with the Vice Premier today. All would like to see something significant happen!

- Donald J. Trump (@realDonaldTrump) October 11, 2019
Meanwhile, China announced a timetable Friday for carrying out a promise to allow full foreign ownership of some finance businesses, starting with futures traders on Jan. 1, the Associated Press reported. Premier Li Keqiang announced plans in July to lift ownership limits in finance a year ahead of the previously announced target of 2021.

Alec Young, managing director of global markets research for FTSE Russell, said that while markets are reacting positively to the likelihood of a limited U.S.-China trade deal, "it's critical to remember that all existing tariffs are expected to remain in place."

"Until we get a deal that ends existing tariffs, 2020 earnings visibility will remain murky, especially in light of the ongoing weakness in the global growth outlook," he said. "So, while this is good news in that things won't be getting any worse, they're not getting much better either. It's only because expectations are extremely low that stocks are reacting so positively to this news."

Both sides are talking and that's a good thing, Young added, "but for stocks to move much higher there's going to have to be more meat on the bones."

Stocks also got a boost from the Federal Reserve's announcement that it will resume buying bonds in the open market, while extending its overnight repo operations until at least January, in order to assist bank lending markets and support system reserves.

Meanwhile, Mnuchin said Trump gave his administration broad authority to put sanctions on Turkey in response to its offensive in northern Syria, which followed Trump's abandonment of Kurdish forces in the area.

The positive trade talk, combined with news of a potential Brexit deal, helped boost bank stocks, with JPMorgan Chase (JPM - Get Report) , Citigroup (C - Get Report)  and Bank of America (BAC - Get Report) all advancing.

Apple (AAPL - Get Report) rose to a record high and finished up 2.7% to $236.21 after the tech giant removed a controversial app from its App store linked to the Hong Kong protests and traders bet that progress in U.S.-China trade talks could spur smartphone demand. It has received several analyst upgrades in recent days as well.

Twilio ( TWLO - Get Report) advanced 3.8% to $114.45 after RBC Capital Markets initiated coverage on the stock with an outperform rating and a $135 one-year price target on what it sees as "one of the most durable growth stories in software."

Fastenal (FAST - Get Report) surged 17.15% to $36.34 after the industrial and construction supply company beat Wall Street's third-quarter earnings and sales expectations.

SAP  (SAP - Get Report)  rose 9.48% to $126.18 after the enterprise software company's high-profile CEO, Bill McDermott, said he will step down after nearly a decade at the helm. SAP is Real Money's Stock of the Day.

Oil prices were higher after Iran said one of its commercial oil tankers was hit by two missiles near the Saudi Arabian port of Jeddah, reigniting military tensions in the Gulf region following attacks on Saudi ships and oil facilities last month.

Contracts for Brent crude, the global benchmark, were rising 2.52% to $60.59 a barrel. West Texas Intermediate crude contracts, which are more tightly linked with U.S. gasoline prices, climbed 2.32% to $54.79 a barrel.

Consumer sentiment rose to 96 from 93.2 in September, according to the University of Michigan, exceeding economists' estimates of 92. Richard Curtin, survey of consumers chief economist, said that "real income expectations rose to their most favorable level in two decades."

"This increase looks like a correction rather than the start of a renewed uptrend," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. "Expectations, meanwhile, rose just 1.4 points to 84.8. The index remains at a high level, but it has been flat, net, for the past four years, and we expect a gentle downward trajectory from here."

U.S. import prices edged up 0.2% in September, the U.S. Bureau of Labor Statistics said, driven by higher fuel prices, following a 0.2% decline the previous month.

Apple, Caterpillar, Citigroup, Goldman Sachs, JPMorgan Chase and Twilio are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.