Global Markets - Stocks rally on trade hopes, dollar set for first positive week of 2019

By Caroline Valetkevitch

NEW YORK (Reuters) - Major stock indexes rose worldwide on Friday and the dollar was on track for its first positive week this year, boosted by optimism that the trade conflict between the United States and China may come to an end.

Adding to strength in equities and supporting U.S. Treasury yields was data that showed U.S. manufacturing output increased the most in 10 months in December.

Wall Street was set for a fourth week of gains, with foreign trade-sensitive industrials <.SPLRCI> up 1.9 percent and leading sector gains for the S&P 500. The Philadelphia SE semiconductor index <.SOX> also rose, while Germany's exporter-heavy DAX <.GDAXI> was up 2.6 percent.

The trade hopes followed a report on Thursday that U.S. Treasury Secretary Steven Mnuchin was considering lifting some or all tariffs imposed on Chinese imports. The Treasury denied Mnuchin had made any such recommendation.

"There seems to be more goodwill on both sides now. If there is any hint of concessions on tariffs or progress in talks, those gestures alone will send the stock market sky-rocketing," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

The Dow Jones Industrial Average rose 310.78 points, or 1.28 percent, to 24,680.88, the S&P 500 gained 33.44 points, or 1.27 percent, to 2,669.4 and the Nasdaq Composite added 79.72 points, or 1.13 percent, to 7,164.18.

The pan-European STOXX 600 index <.STOXX> rose 1.80 percent and MSCI's gauge of stocks across the globe gained 1.18 percent.

Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for the latest round of talks aimed at resolving the trade dispute between the world's two largest economies.

Recent indicators show signs that the Chinese economy is losing momentum.

The dollar strengthened and was poised for its first weekly gain in five weeks.

The dollar index rose 0.27 percent, with the euro down 0.25 percent to $1.1366.

U.S. Treasury yields rose to three-week highs as investors piled back into Wall Street.

Benchmark 10-year notes last fell 12/32 in price to yield 2.7878 percent, compared with 2.747 percent late on Thursday.

Oil prices rose after an OPEC report showed that members' production fell sharply last month.

Brent crude was last up $1.49, or up 2.44 percent, at $62.67 a barrel. U.S. crude was last up $1.62, or up 3.11 percent, at $53.69 per barrel.

(Additional reporting by Ritvik Carvalho in London and Medha Singh; editing by Steve Orlofsky and Rosalba O'Brien)