US STOCKS-S&P 500, Dow eye record highs at open on trade deal hopes, solid earnings

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* Kudlow says U.S. and China getting close to trade deal
* Applied Materials jumps on strong forecast
* J.C. Penney gains on smaller-than-expected loss
* Data shows domestic retail sales rebound in October
* Futures up: Dow 0.37%, S&P 0.32%, Nasdaq 0.54%

(Adds comments, updates market action)
By Arjun Panchadar
Nov 15 (Reuters) - The S&P 500 and Dow Jones indexes were
set to hit fresh record highs at the open, as upbeat comments
related to U.S.-China trade talks and strong earnings from
semiconductor industry bellwether Applied Materials helped lift
the mood.
White House economic adviser Larry Kudlow said late on
Thursday that the world's two largest economies were getting
close to a trade agreement, citing what he called very
constructive talks with Beijing about ending a 16-month trade
war. On Friday, U.S. Commerce Secretary Wilbur Ross said there
would be a call between U.S. and Chinese officials later in the
day as both sides continue to hammer out a phase one trade pact,
but added U.S. tariffs on Chinese imports could still start Dec.
15. "We have been here so many times where the market gets its
hopes up and then it gets crushed," said Scott Brown, chief
economist at Raymond James in St. Petersburg, Florida.
"But certainly with an election coming up next year, you
would want to have all these things behind you, so a mini-deal
or a trade truce makes a lot of sense."
Shares in chip gear maker Applied Materials Inc AMAT.O
jumped 6.6% in premarket trading after it forecast first-quarter
results above estimates, as it expects more clients to upgrade
their equipment ahead of the 5G rollout in key markets.
Chipmakers have been among the victims of a long-running
trade war between Washington and Beijing, as they rely on China
for a huge portion of their revenue. However, signs of progress
on trade have helped drive the Philadelphia Semiconductor index
.SOX to record levels.
Other chip stocks Advanced Micro Devices Inc AMD.O , Micron
Technology Inc MU.O and Lam Research Corp LRCX.O gained
between 1.2% and 1.8%.
The benchmark S&P hit an all-time closing high on Thursday,
as robust earnings from retail giant Walmart Inc WMT.N pointed
to a strong U.S. consumer at a time when spending is seen as a
key support for the economy.
Shares in J.C. Penney Co Inc JCP.N soared 10% on Friday
after the embattled retailer reported a smaller-than-expected
quarterly loss, benefiting from lower advertising expenses and
an increase in margins. Data showed U.S. retail sales rebounded in October, but
consumers cut back on purchases of big-ticket household items
and clothing, which could temper expectations for a strong
holiday shopping season. Another set of data expected at 9:15 a.m. ET is likely to
show industrial production declined in October.
Wall Street's main indexes have been powered recently by
hopes of a trade deal, a largely better-than-expected
third-quarter earnings season and a third interest rate cut by
the Federal Reserve.
At 8:49 a.m. ET, Dow e-minis 1YMcv1 were up 103 points, or
0.37%. S&P 500 e-minis EScv1 were up 10 points, or 0.32% and
Nasdaq 100 e-minis NQcv1 were up 44.25 points, or 0.54%.
Nvidia Corp NVDA.O shares were marginally higher as the
company predicted strong demand for chips used in data centers,
but said it expects its gaming chip business to be impacted by
seasonal weakness in the fourth quarter. RH RH.N rose 6.7% as Warren Buffett's Berkshire Hathaway
Inc BRKa.N disclosed a new investment in the luxury furniture
and home furnishings chain once known as Restoration Hardware.