By Sinead Carew
The S&P energy sector <.SPNY> closed up 2 percent as Brent crude
The consumer discretionary sector <.SPLRCD> saw strong gains in media and retail stocks, while the industrials index <.SPLRCI> was helped by airlines after news from No. 2 U.S. carrier Delta Air Lines
"The unifying factor of today's move and this whole week is a heightened confidence in the pace of economic activity. That helps explain the demand picture, which has oil up at $70," said Scott Clemons, chief investment strategist at Brown Brothers Harriman in New York.
The Dow Jones Industrial Average <.DJI> rose 205.6 points, or 0.81 percent, to 25,574.73, the S&P 500 <.SPX> gained 19.33 points, or 0.70 percent, to 2,767.56 and the Nasdaq Composite <.IXIC> added 58.21 points, or 0.81 percent, to 7,211.78.
Wall Street had dropped on Wednesday, the first daily decline for S&P and Nasdaq in 2018, after a report China would slow U.S. government bond purchases and a report that U.S. President Donald Trump would end a key trade agreement.
The major indexes pared gains briefly in late afternoon trading on Thursday after New York Fed President William Dudley said tax cuts could lead to economic overheating. He predicted above-trend GDP growth with rising inflation in 2018.
"Dudley is touching on something that investors should fear," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago. "The only threat to the stock market right now is high interest rates. If rates are higher, the present value of equities are too high."
Investors are betting on bullish quarterly earnings reports from big companies and details on savings from federal tax cuts. The reporting season kicks off in earnest on Friday, with results from the big U.S. banks JPMorgan Chase & Co
"This market feels this week like a deep breath before the onslaught of earnings reports," Clemons said. "This is a wait-and-see mode with a healthy amount of optimism."
Delta Air Lines
Advancing issues outnumbered declining ones on the NYSE by a 3.40-to-1 ratio; on Nasdaq, a 3.18-to-1 ratio favoured advancers.
On U.S. exchanges 6.74 billion shares changed hands, above the 6.39 billion average for the last 20 trading days.
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