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* Major U.S. stock averages set to cap 3-day sell-off
* J&J gains as tests show no asbestos in baby powder
* Alphabet advances after Sundar Pichai named CEO
* Indexes up: Dow 0.74%, S&P 500 0.78%, Nasdaq 0.66% (Updates to late afternoon, changes dateline, byline)
By Stephen Culp
NEW YORK, Dec 4 (Reuters) - Wall Street gained ground on Wednesday in a broad-based rally as investor sentiment brightened after U.S. President Donald Trump said talks with China on an interim trade deal were going "very well."
All three major U.S. stock indexes were on course to snap a three-day losing streak, with financials and tariff-sensitive technology stocks leading the charge.
Trump's comments supported a Bloomberg report that the world's two largest economies were closer to agreeing how many tariffs would be rolled back in a "phase one" trade deal.
"(The report) saying that White House officials are much closer to a trade agreement is what the market's focusing on today," said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in New York.
Fears that a stalemate in negotiations could lead to new tariffs taking effect as scheduled on Dec. 15 have made market participants more risk averse in recent days, with the major U.S. stock averages backing off last week's record highs.
"Between now and Dec. 15, you'll see more tough talk and you'll probably see the president back off tariffs," Pavlik added. "But anything could happen."
"If they delay (the Dec. 15 tariffs) and keep negotiating, the market could reach new highs."
The Dow Jones Industrial Average rose 203.05 points, or 0.74%, to 27,705.86, the S&P 500 gained 24.26 points, or 0.78%, to 3,117.46 and the Nasdaq Composite added 56.60 points, or 0.66%, to 8,577.24.
All 11 major sectors of the S&P 500 were in positive territory, with energy enjoying the biggest percentage gain, boosted by a 4.2% jump in crude prices.
Trade-vulnerable industrials were up 1.0%, the sector's best day in a month.
Alphabet Inc rose 2.1% following its announcement that Sundar Pichai would take the helm as CEO.
Shares of Johnson & Johnson advanced 1.5% after recent tests showed its baby powder was asbestos-free. U.S. Food and Drug Administration investigations reported trace amounts of the carcinogen in the product earlier this year.
Online travel platform Expedia Group Inc jumped 7.0%, among the top gainers on the S&P 500, after chair Barry Diller announced the resignations of the company's chief executive and financial officers.
On the economic front, market participants largely shrugged off weak November data from ADP, which reported fewer private payroll additions than expected, and from the Institute for Supply Management's PMI report, which showed the services sector's growth losing steam.
Investors are now eyeing the U.S. Labor Department's November employment report, expected on Friday.
Advancing issues outnumbered declining ones on the NYSE by a 3.12-to-1 ratio; on Nasdaq, a 1.97-to-1 ratio favored advancers.
The S&P 500 posted 15 new 52-week highs and no new lows; the Nasdaq Composite recorded 53 new highs and 32 new lows. (Reporting by Stephen Culp Editing by Sonya Hepinstall)