UKX FTSE 100 Index

By Will Horner and Akane Otani 

U.S. stocks climbed Monday as officials from Washington and Beijing kicked off their latest round of negotiations over trade policy.

The Dow Jones Industrial Average rose 80 points, or 0.3%, to 23513, erasing declines from earlier in the session. The S&P 500 added 0.6% and the Nasdaq Composite gained 0.9%.

Investors are beginning the week with their focus on the U.S. and China's negotiations, something many hope will help bring the two countries closer to a resolution in their trade fight. Signs of slowing economic growth around the world have added to many investors' sense of anxiety in recent weeks, contributing to wild swings in the stock market.

The fact that policy makers in the U.S. and China have agreed to meet is a positive sign, said Felix Lam, a portfolio manager at BNP Paribas Asset Management. Still, the key question is whether the two countries will reach a trade deal, Mr. Lam said.

"Any positive outcome from the trade talks would have a more long-lasting impact on the earnings trajectory of corporations in Asia," he said, adding that delays, on the other hand, could hit corporate profits.

Deal news drove swings across the stock market Monday.

Shares of drugmaker Eli Lilly fell 0.4% after the company said it was buying Loxo Oncology, adding to its oncology-treatment portfolio. Loxo shares surged 66%.

Meanwhile, Dollar Tree shares jumped 5.5% after activist investor Starboard Value took a stake in the company. Starboard is pushing the retailer to sell its Family Dollar business.

Elsewhere, the Stoxx Europe 600 fell 0.3%. The U.K.'s FTSE 100 lost 0.6% as investors there awaited a parliamentary debate, set to begin this week, on the nation's departure from the European Union.

British Prime Minister Theresa May is widely expected to lose a vote later this month on her planned Brexit deal. If "there remains an impasse in the U.K. parliament at the 11th hour, then a [second Brexit] referendum...could become the only way out of the mire," said UniCredit analysts in a note.

Stocks across Asia finished higher, with Japan's Nikkei Stock Average jumping 2.4% as the yen weakened. A weaker yen tends to help the country's exporters, since it makes their goods cheaper to foreign buyers.

South Korea's Kospi climbed 1.4%, while the Shanghai Composite advanced 0.7%.

Later this week, investors will get a look at fresh data on consumer prices, something that could provide more clarity about how quickly inflation is picking up.

Recent readings on inflation have been relatively muted, helping bolster bets among investors that the Federal Reserve might have to slow down its pace of interest rate increases. Federal-funds futures showed Monday a 72% chance of the Fed holding rates steady this year, up from 38% one month ago, according to CME Group.

Joanne Chiu contributed to this article

Write to Akane Otani at akane.otani@wsj.com

(END) Dow Jones Newswires

January 07, 2019 11:09 ET (16:09 GMT)

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