US STOCKS-Wall Street jumps but ends off highs after partial trade deal

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* Trump announces phase 1 partial trade deal
* Indexes up: Dow 1.2%, S&P 500 1.1%, Nasdaq 1.3%

(Adds analyst comments, other details)
By Caroline Valetkevitch
NEW YORK, Oct 11 (Reuters) - U.S. stocks ended more than 1%
higher on Friday though well off the day's highs after the
announcement of a partial trade deal between the United States
and China.
Indexes cut their gains late in the session as the deal was
announced amid worries over the possibility of further flare-ups
before the agreement is finalized, strategists said.
President Donald Trump, speaking to reporters after talks
with Chinese Vice Premier Liu He, said the United States and
China had come to a substantial phase-1 trade deal, reaching
agreement on intellectual property, financial services and big
agricultural purchases. The preliminary, partial deal was the biggest step toward
resolving a 15-month tariff war between the world's two largest
economies.
The market had risen in recent days due to optimism for an
agreement and the S&P 500 .SPX was up as much as about 1.9%
earlier in the session.
"The main reason the market rallied the past couple of days
was hope that there would be an agreement, even a small
agreement, and that this trade war would be done for the
foreseeable future," said Michael O'Rourke, chief market
strategist at JonesTrading in Greenwich, Connecticut.
"It looks like while there is an agreement, this is still
going to ... drag out and be an issue."
Top-level discussions between the two countries concluded
their second day on Friday. Cyclicals were among the day's best-performing groups, with
the S&P industrial index .SPLRCI up about 2% ahead of the
third-quarter earnings season, which is set to begin next week.
The Dow Jones Industrial Average .DJI rose 319.92 points,
or 1.21%, to 26,816.59, the S&P 500 .SPX gained 32.14 points,
or 1.09%, to 2,970.27 and the Nasdaq Composite .IXIC added
106.27 points, or 1.34%, to 8,057.04.
Indexes also gained for the week, with the Dow and Nasdaq up
0.9% each and the S&P 500 up 0.6%.
The timing of the trade news had a lot to do with the
late-day volatility, said Michael James, managing director of
equity trading at Wedbush Securities in Los Angeles.
"There were 15 minutes to go in the trading day on a Friday
... after the Dow had risen 700 points in the last two days," he
said. "Anything that was less than a comprehensive agreement was
likely to see some degree of market sell off."
Analysts expect S&P 500 earnings to have declined 3.2%
year-on-year in the third quarter, which would mark the first
fall since 2016, according to IBES data from Refinitiv.
Bets for another interest rate cut by the Federal Reserve
fell after data showed a rise in consumer sentiment for the
month of October. Apple's stock AAPL.O rose 2.7% as Wedbush raised its price
target, citing confidence in the company's new video streaming
service. The S&P industrial index was boosted by a 17.2% jump in
shares of Fastenal Co FAST.O after the industrial distributor
beat quarterly profit expectations. Advancing issues outnumbered declining ones on the NYSE by a
3.14-to-1 ratio; on Nasdaq, a 3.08-to-1 ratio favored advancers.
The S&P 500 posted 27 new 52-week highs and no new lows; the
Nasdaq Composite recorded 44 new highs and 60 new lows.
Volume on U.S. exchanges was 7.59 billion shares, compared
to the roughly 7 billion average for the full session over the
last 20 trading days.