Stocks, dollar up on trade hopes; Wall Street set for 4th week gains

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 up 1.6 percent and leading sector gains for the S&P 500. The Philadelphia SE semiconductor index also rose, while Germany's exporter-heavy DAX was up 2.3 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.

"Usually these 'rumors' aren't necessarily untrue, they just aren't true yet, which generally means there is some progress going on but they just don't want to tell anyone yet," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

The Dow Jones Industrial Average rose 242.89 points, or 1 percent, to 24,612.99, the S&P 500 gained 30.77 points, or 1.17 percent, to 2,666.73 and the Nasdaq Composite added 84.89 points, or 1.2 percent, to 7,169.35.

The pan-European STOXX 600 index rose 1.85 percent and MSCI's gauge of stocks across the globe gained 1.17 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.

Indicators released recently showed 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 0.24 percent, with the euro down 0.27 percent to $1.1364.

Benchmark 10-year notes last fell 11/32 in price to yield 2.786 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 $1.72, or up 2.81 percent, at $62.90 a barrel. U.S. crude was last up $1.75, or up 3.36 percent, at $53.82 per barrel.

(Additional reporting by Ritvik Carvalho in London and Medha Singh; editing by Raissa Kasolowsky and Steve Orlofsky)