Alex Veiga/AP Business Writer

Stocks are closing at more record highs as traders hope that the US and China can make enough progress on trade to avoid new tariffs kicking in over the weekend. Banks and technology companies led the gains. The S&P 500 rose 26 points, or 0.9%, to 3,168. The Dow Jones Industrial Average rose 220 points, or 0.8%, to 28,131. The Nasdaq rose 63 points, or 0.7%, to 8,717. The S&P 500 and Nasdaq are at record highs. Traders dumped safe-play investments like utilities and real estate companies and moved money into riskier assets. Bond prices also fell, sending yields sharply higher.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Banks and technology companies powered stocks higher on Wall Street in afternoon trading Thursday after President Donald Trump said that the U.S. is getting close to a “big deal” in its trade war with China.

Traders were also encouraged by a Wall Street Journal report saying Washington has offered to slash existing tariffs and cancel new ones in exchange for more agricultural purchases and intellectual property protection. The rally had the S&P 500 on track for a record high and its second straight gain.

Wall Street has been watching closely for any developments in the ongoing trade negotiations all week as the nations head for another escalation. A new round of U.S. tariffs on Chinese goods is set to kick in on Sunday and raise the prices of popular products including laptops and cellphones. Investors are hoping that enough progress is made to prompt a delay from Washington.

“If we do see the tariffs removed, that's saying, ‘OK, China must be agreeing to things or we must be right there,'” said Ben Phillips, chief investment officer at EventShares. “That’s why the market is looking at tariffs as the bellwether to a trade deal.”

Banks helped lead the gains as bond prices fell, sending yields higher. Bank of America rose 3.2%. Higher yields allow banks to charge more lucrative interest rates on mortgages and other loans. The yield on the 10-year Treasury jumped to 1.89% from 1.79% late Wednesday. It's an unusually large rise and signals more confidence in economic growth.

Technology companies also made strong gains. The sector is one of the most sensitive to swings in trade because many of the companies rely on China for sales and supply chains. Cisco Systems climbed 3.1%.

Real estate companies, utilities and household goods makers lagged the market in another sign that investors were shifting money away from safe-play investments.

KEEPING SCORE: The S&P 500 index was up 0.7% as of 3:24 p.m. Eastern time. The Dow Jones Industrial Average rose 188 points, or 0.7%, to 28,099. The Nasdaq gained 0.6%. The Russell 2000 index of smaller company stocks climbed 1%.

Major stock indexes in Europe closed broadly higher.

TAKEOFF: Delta Air Lines rose 3.1% after the most profitable U.S. carrier gave investors a surprisingly good profit and revenue forecast for 2020. The company said it expects sustained demand for air travel and stable prices for jet fuel.

SPREADING LUV: Southwest Airlines gained 1.1% after it reached a deal with Boeing for compensation over the grounding of the 737 Max aircraft.

NOT SO STYLISH: Tailored Brands slumped 9.9% after the owner of Men's Wearhouse issued quarterly guidance that was below what analysts were expecting.

CASH REGISTERS RINGING? Friday’s retail sales report from the Commerce Department will offer investors a solid measure of the economy’s health in a week dominated by uncertainties over trade. Economists expect retail sales to rise in November. The measure gives more insight into consumer spending, which has been among the brighter spots in the economy helping to push growth.

AP Business Writer Damian J. Troise contributed.

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