US close: Stocks close higher as Beijing and Washington agree to trade talks

Wall Street stocks closed sharply higher on Thursday after China's Commerce Ministry revealed that Beijing's top trade negotiator, Liu He, had spoken with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

At the close, the Dow Jones Industrial Average was up 1.41% at 26,728.15, while the S&P 500 was 1.30% ahead at 2,976.00 and the Nasdaq Composite saw out the session 1.75% firmer at 8,116.83.

Following on from the positive news out of China in the previous session, the Dow Jones closed 372.68 points higher on Thursday after Beijing and Washington were said to have agreed on Thursday to hold another round of trade negotiations towards the beginning of October

Consultations will be made in mid-September in preparation for the meeting.

"Both sides agreed they should work together and take practical actions to create favourable conditions for the negotiations," read the statement from the Chinese ministry of commerce.

However, Oanda's Craig Elam pointed out that the announcement was "not without confusion", with China claiming that both sides had agreed to meet, while the US side only confirmed that ministerial-level contacts would take place in coming weeks - but did not specify when.

"Investors are nevertheless buoyed by the comments as it at least opens the door to talks to end the trade war that has already plagued the global economy," said Erlam.

On the data front, private-sector employment in the US rose more than expected in August, according to figures released on Friday by ADP.

Employers added 195,000 jobs last month versus expectations for a 149,000 increase and marking the biggest increase since April. Meanwhile, July's total of jobs added was revised down from 156,000 to 142,000.

Still on employment, initial US jobless claims were little changed over the latest reference week, pointing to still tight conditions in the jobs market.

According to the Department of Labor, unemployment claims rose by 1,000 over the week ending on 31 August to reach 217,000.

Elsewhere, the Institute for Supply Management's services index rose to 56.4 from 53.7 in July, beating expectations for a reading of 54.0, while the non-manufacturing business activity index increased to 61.5 from 53.1 the month before.

Lastly, factory orders rose for a second straight month in July, the Commerce Department said Thursday. The 1.4% increase was led by volatile civilian aircraft orders.

In corporate news, the trade developments sent shares in semiconductor firms like AMD and VanEck Vectors, as well as banks JP Morgan Chase and Citigroup soaring. Shares in trade bellwethers Caterpillar and Boeing also flew during the session.