US STOCKS-Stimulus optimism and Apple lead to Wall Street rally

(For a live blog on the US stock market, click or type LIVE / in a news box)

* Apple jumps report of higher iPhone production in 2021

* Technology sector seen as resilient by pandemic analyst

* Utilities and equipment sectors among the strongest performers

* Indices: Dow + 1.16%, S&P 500 + 1.19%, Nasdaq + 0.94% (updates before noon)

By Noel Randewich and Karen Pierog

Dec 15 (Reuters) – Wall Street rose on Tuesday as optimism about a possible government boost kept sentiment high, as investors bet on more signs of easy monetary policy from the last meeting of the year by the Federal Reserve.

Apple Inc was the biggest boost for all three US benchmarks, jumping 4% to its highest level since September, after a report said it plans to increase iPhone production by 30% in the first half of 2021.

Some investors saw the recent spike in coronavirus infections and deaths as an impetus for a quick deal on a COVID-19 stimulus bill, with economically sensitive sectors such as consumer discretionary and materials leading the way.

The S&P 500 utilities index climbed 2%, on track for its strongest one-day rise since early November.

“They’ve lagged, and you could see a small rotation of people looking for returns,” said Andrew Mies, Meridian’s chief investment officer, referring to utilities.

Broad stock market gains were a healthy sign, Mies added.

US House Chairman Nancy Pelosi invited top congressional leaders to meet in an effort to finalize a massive government spending deal and reach an agreement on a new package of coronavirus control.

The Fed is also expected to signal low interest rates for the foreseeable future in its two-day meeting starting Tuesday. The recent introduction of the coronavirus vaccine is expected to improve the central bank’s outlook for 2021.

The Dow Jones Industrial Average rose 1.16% to points 30,206.61, while the S&P 500 rose 1.19% to 3,690.79.

The Nasdaq Composite added 0.94% to 12,556.66.

Backed by Apple, the S&P 500 technology sector index rose 1.3%. The industry outperformed the broader market during the pandemic and is up more than 35% so far, with investors viewing the industry as resilient to virus-related disruptions.

“The market likes to turn to tech when it fears the economy will crash due to an increase in infections and shutdowns,” said Christopher Grisanti, chief equity strategist at MAI Capital Management.

Increased liquidity and ultra-low lending rates have led investors to flock to stocks during the COVID-19 pandemic, while recent optimism about a vaccine pushed the S&P 500 to a series of record highs last week.

“We remain overweight equities and have added selective exposure to more cyclical sectors, including industrials and services, materials, semiconductors, housing and consumer discretionary,” wrote Erin Browne and Geraldine Sundstrom, CEOs at asset manager PIMCO.

Eli Lilly and Co shot up 5% after the company said it would buy Prevail Therapeutics Inc in a potential $ 1 billion deal to expand its presence in the lucrative gene therapy field. Prevail’s shares are up about 80%.

Shares of Moderna Inc fell more than 6%, even after U.S. Food and Drug Administration staff did not raise new concerns about data on the drug manufacturer’s COVID-19 vaccine. The vaccine will receive emergency approval Friday, according to a report.

There were more problems than the diminishing problems on the NYSE at a ratio of 3.07 to 1; on Nasdaq, a ratio of 2.03 to 1 was in favor of progress.

The S&P 500 posted 17 new highs in 52 weeks and 2 new lows; the Nasdaq Composite registered 150 new highs and 17 new lows. (Additional reporting by Ambar Warrick, Shreyashi Sanyal, and Lisa Pauline Mattackal in Bengaluru; edited by Aurora Ellis)