NEW YORK (AP) -- Stocks rose again Monday, led by gains in retailers and smaller companies after a report showed strong orders last month for service-sector companies, where most Americans work. Investors were also encouraged by the resumption of trade talks between the U.S. and China.
That helped stocks build on the huge gains they made Friday. The U.S. economy has been a top concern for investors over the last three months, and the strong report on service companies showed that banks, health care and construction companies were holding up well.
Dollar stores and other retailers, clothing companies and car makers all climbed. Amazon surpassed Microsoft to become the most valuable publicly-traded company. The two-day gain followed a huge pullback last Thursday, when a weak report on manufacturing helped send large multinational companies sharply lower.
"The portion of the economy that's domestically focused is doing better than the portion that is exporting, and arguably that is coming from the trade winds and the tensions we see from that," said Jason Pride, chief investment officer of private clients at Glenmede.
The S&P 500 added 17.75 points, or 0.7 percent, to 2,549.69. The index, a benchmark for many mutual funds, closed at its highest in more than three weeks, and it's risen 8.4 percent since Dec. 24. It's still 13 percent below the record high it reached late September.
The Dow Jones Industrial Average climbed 98.19 points, or 0.4 percent, to 23,531.35. The Nasdaq gained 84.61 points, or 1.3 percent, to 6,823.47.
Smaller companies, which tend to be more closely linked to how well the domestic economy is doing, did far better than the rest of the market. The Russell 2000 jumped 24.62 points, or 1.8 percent, to 1,405.37.
While trading has been rough over the last two weeks, stocks have moved higher as investors hoped that the U.S. and China will finally make progress in trade talks. But Wall Street is fearful that the trade dispute is far from a resolution. The U.S. and China both placed tariffs on billions of dollars' worth of each other's exports in 2018, and those taxes are likely to rise in March if they don't make progress in negotiations.
Reports of the latest round of trade discussions contributed to the market's big rally Friday.
"This is the biggest wild card, because you don't know exactly how these parties are going to reach an agreement," said Pride. "Just keeping the tariffs that have been announced so far and not going ahead with new ones would be a positive surprise for the market."
Amazon rose 3.4 percent to $1,629.51, bringing its value to $796.8 billion, compared to $783.6 billion for Microsoft.
Dollar Tree rose after activist investment firm Starboard value disclosed a stake in the discount retailer and pushed the company to consider selling the Family Dollar chain it bought in 2015. It nominated seven candidates for seats on Dollar Tree's board of directors. The stock climbed 5.5 percent to $97.96. Elsewhere, Target gained 4.9 percent to $69.68.
Oil prices continued their recent rally. U.S. crude rose 1.2 percent to $48.52 per barrel in New York. After sinking to an 18-month low of $42.53 a barrel on Dec. 24, the price of U.S. crude has risen for seven of the last eight trading days. Brent crude, used to price international oils, rose 0.5 percent to $57.33 per barrel in London.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.69 percent from 2.65 percent.
The parent company of Pacific Gas & Electric plunged after Reuters reported that the company might file for bankruptcy protection as it faces potentially huge liabilities connected to deadly wildfires in California in 2017 and 2018. The company's stock dropped 22.3 percent to $18.95. PG&E traded at almost $70 a share in October 2017 and about $48 in November 2018.
In the second big pharmaceutical deal of 2019, Eli Lilly will buy Loxo Oncology for about $8 billion as it bulks up on cancer treatments that target gene abnormalities. Loxo soared 66.3 percent to $232.65 and Lilly added 0.5 percent to $115.28.
On Thursday Bristol-Myers Squibb agreed to buy Celgene for $74 billion, one of the largest drug industry acquisitions of all time.
Shares of the companies that run stock exchanges fell after a group of nine banks, brokers and other companies said they are planning to launch a new exchange. The companies said their Members Exchange will reduce costs and simplify trading.
Nasdaq fell 2.6 percent to $79.81 and Intercontinental Exchange, the parent company of the New York Stock Exchange, fell 3 percent to $73.38.
Mattel jumped 7.7 percent to $11.21 after the toy company said it's gained the rights to make dolls of the South Korean pop band BTS. Last year BTS became the first K-Pop group to reach the top slot on the Billboard Top 200. The licensing agreement also covers collectible figures and games.
In other commodities trading, wholesale gasoline dipped 0.5 percent to $1.34 a gallon and heating oil rose 0.5 percent to $1.78 a gallon. Natural gas sank 3.3 percent to $2.94 per 1,000 cubic feet.
Gold rose 0.3 percent to $1,289.90 an ounce. Silver slipped 0.2 percent to $15.76 an ounce. Copper fell 0.4 percent to $2.64 a pound.
The dollar rose to 108.59 yen from 108.51 yen. The euro rose to $1.1478 from $1.1400.
Germany's DAX shed 0.2 percent and the FTSE 100 in Britain and CAC 40 France both fell 0.4 percent.
The Japanese Nikkei 225 index gained 2.4 percent, while South Korea's Kospi rose 1.3 percent. Hong Kong's Hang Seng climbed 0.8 percent.