U.S. stock indexes finished higher on renewed optimism about China-U.S. trade talks and suggestions from President Trump that he might not sign the Hong Kong bill that supports pro-democracy protesters, and which has angered Beijing.

The Dow Jones Industrial Average gained 108.92 points to 27,875.21 while the S&P 500 was up 6.69 points to 3,110.23 and the Nasdaq Composite Index rose 13.67 points to 8,519.88.

For the week the Dow dropped 31.67 points, while the S&P edged down 2.31 points, its first weekly loss since early October.

Volume on the New York Stock Exchange totaled 2.77 billion shares with 1,784 issues advancing, 59 setting new highs, and 1,174 declining, with 36 setting new lows.

Active movers were led by Eyegate Pharmaceuticals Inc. (EYEG), Stage Stores Inc. (SSI) and Akerna Corp. (KERN).

Trump told “Fox & Friends” on Friday a new trade deal with China is “potentially very close.”

“We have a very good chance to make a deal,” he said.

But Trump also suggested he might veto the pro-democracy Hong Kong bill that unanimously passed the House and Senate. “We have to stand with Hong Kong, but I’m also standing with President Xi, he’s a friend of mine,” Trump said. “He’s an incredible guy.”

Trump added: “We are also in the process of making one of the largest trade deals in history. And if we could do that, it would be great.”

The South China Morning Post reported early Friday that Xi Jinping wants an interim trade deal with the U.S. but will retaliate if necessary if Washington keeps putting up obstacles.

“We want to work for a phase one agreement on the basis of mutual respect and equality,” Xi said. “When necessary we will fight back, but we have been working actively to try not to have a trade war. We did not initiate this trade war and this is not something we want.”

Edward Moya, senior market analyst for OANDA, wrote that: “Xi’s comments did not reveal anything new, but served as a reminder that China is also in need of a trade deal.”

“Stocks’ short-term direction is still all about trade,” said Alec Young, managing director of global markets research at FTSE Russell. “Given precious little substance of late on that front, it’s no surprise stocks are stuck in a tight trading range with volatility at multimonth lows.”

In her first speech as president of the European Central Bank, Christine Lagarde called for a "new European policy mix" to generate growth in the eurozone economy. She also called for increased public investment in the euro zone to push up domestic demand.

Lagarde said little about monetary policy, except to note that the central bank will “continue to support the economy and respond to future risks in line with our price stability mandate.”

Data suggested business conditions in Europe are worsening -- IHS Markit’s flash November composite Purchasing Managers’ Index fell to 50.3 from October’s 50.6, just above the 50 mark which separates growth from contraction.

IHS Markit said November’s Index suggests gross domestic product growth of only 0.1% in the third quarter, below the 0.2% figure from last quarter.

In contrast, the U.S. manufacturing sector showed signs of strength.

IHS Markit said its flash manufacturing purchasing managers index for the U.S. climbed to 52.2 in November from 51.3 in October. The flash services purchasing managers index in November edged up to 51.6 from 50.6.

Overnight, Asian markets finished lower with the Hang Seng dropping 0.48% while Japan's Nikkei 225 fell 0.32% and China's Shanghai Composite was lost 0.63%.

European markets finished higher led by the FTSE 100 which gained 1.22% while Germany's DAX rand France's CAC 40 each edged up 0.2%.

Crude oil futures fell 1.02% to $57.98 per barrel and Brent crude gained 0.36% at $63.62. Gold futures edged down 0.08%.

The euro was down 0.34% to $1.1021 while the pound sterling slipped 0.59% to $1.2834.

The yield on the 10-year Treasury edged up 0.11% to 1.774% while yield on the 30-year Treasury dropped 0.36% to 2.23%.

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