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S&P 500 index posts its best weekly gain since November

CNBC logo CNBC 3/15/2019 Fred Imbert
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Stocks posted strong weekly gains as investors cheered renewed optimism on the U.S.-China trade front Friday.

The Dow ended 138 points higher as Boeing shares turned around to close up 1.5 percent. Boeing's turnaround was sparked by a report saying the company plans to roll out a software upgrade for its 737 Max aircraft. The stock had been under pressure all week after an Ethiopian Airlines flight using a 737 Max plane crashed Sunday, prompting several countries to ground flights involving the plane.

Gains in the tech and consumer discretionary sectors pushed the S&P 500 up 0.5 percent. Tech shares also bolstered the Nasdaq, which added 0.75 percent.

The S&P 500 and Nasdaq both rose at least 2.9 percent this week, though the laggard Dow gained only 1.7 percent amid Boeing's troubles. The S&P 500 posted its biggest one-week gain since November.

Stocks have been on a tear this year, with the three major indexes rising more than 10 percent each in 2019.

"Coming off the lows in December, we thought that was a volatility event. We thought we could get back to those all-time highs by about late March to early April," said Craig Callahan, the president at Icon Funds. Valuations "still backs up that view."

This week's gains were largely led by tech shares, as the sector surged 4.9 percent. The tech sector also became the best-performer of 2019. Nvidia was the best-performing stock in the sector, rising more than 12 percent while fellow semiconductor stocks like Broadcom and Lam Research also rose sharply this week.

Semiconductor shares rose broadly on Friday, as the VanEck Vectors Semiconductor ETF (SMH) climbed 2.7 percent. Broadcom shares led the gains, rising more than 8 percent after the company reported better-than-expected quarterly earnings.

Chinese Vice Premier Liu He spoke via telephone with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer, Xinhua news agency reported Friday. The report, according to The South China Morning Post, said: "The two sides have further made concrete progress on the text of the trade agreement between the two sides."

The news comes after CNBC reported Thursday that Chinese negotiators suggest combining a state visit to the U.S. with the signing of a trade deal. Beijing wants a deal to be fully ironed out before President Xi Jinping meets with U.S. President Donald Trump.

"US-China trade negotiations will likely reach a temporary deal, transforming future negotiations into a framework to monitor China's compliance with trade and intellectual property policies," Alberto Gallo, the head of macro strategies at Algebris Investments, wrote in a note. He added, however, that "binary events" like this "may not translate into tail risks."

AT&T shares rose 1.3 percent after Raymond James upgraded the telecommunications giant to outperform from market perform, citing an attractive valuation relative to rival Verizon. "We believe that the combination of positive earnings growth and delivering over the course of the year will being investors back to AT&T," analyst Frank Louthan said in a note.

Ulta Beauty surged 8.3 percent on the back of better-than-expected quarterly earnings. The company's same-store sales also rose 9.4 percent, topping an estimate of 7.9 percent.

Tesla shares fell 5 percent after investors were left disappointed with the unveiling of the Model Y, the car company's latest electric vehicle.

CNBC's Sam Meredith and Spriha Srivastava contributed to this report.

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