US STOCKS-Wall St backed by Apple, stimulus stakes when Fed takes center stage

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* Apple rises after reporting higher iPhone production in 2021

* Technology sector seen as resilient by pandemic analyst

* S&P 500 materials sector nears record high

* Indexes up: Dow 0.64%, S&P 500 0.70%, Nasdaq 0.58% (adds comments, updates prices everywhere)

By Ambar Warrick and Shreyashi Sanyal

Dec 15 (Reuters) – US stock indices rose Tuesday as progress toward a massive government stimulus bill kept the mood high, as investors hoped for continued signals 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, rising 3.5% to a high in more than three months after a report said it plans to increase iPhone production by 30% in the first half from 2021.

Markets saw a recent spike in coronavirus infections and deaths as a plea for the swift passing of a COVID-19 stimulus bill, with economically sensitive sectors such as consumer discretionary, materials and utilities gaining the most.

The materials sector of the S&P 500 traded within a peak peak distance of a record high.

Congress talks were underway late Monday to agree on a bill to prevent a government shutdown, with Democratic and Republican leaders looking more optimistic about including another round of coronavirus relief, the first new emergency measure since April.

The Fed is also expected to announce an easy monetary policy in the two-day meeting starting Tuesday. The recent introduction of the coronavirus vaccine is expected to improve the central bank’s outlook for 2021.

At 12:06 p.m. ET, the Dow Jones Industrial Average rose 190.68 points, or 0.64%, at 30,052.23, the S&P 500 was up 25.63 points, or 0.70%, at 3,673.12. The Nasdaq Composite rose 72.32 points, or 0.58%, to 12,512.36.

Technology shares added 0.9%. The industry has outperformed its competitors through the pandemic due to its perceived resilience 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 borrowing rates have seen investors flock to equities to reap returns from the COVID-19 pandemic, while recent optimism over a vaccine pushed the S&P 500 to a string 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 were up 3.8% after the company said it would purchase Prevail Therapeutics Inc in a potential $ 1.04 billion deal to expand its presence in the lucrative gene therapy field. Prevail’s shares were up about 83.0%.

Shares of Moderna Inc fell 4.8% even as U.S. Food and Drug Administration employees expressed no new concerns about data on the drug manufacturer’s COVID-19 vaccine. The vaccine will receive emergency approval Friday, according to a report.

Early issues were in the minority with a ratio of 2.59 to 1 on the NYSE and a ratio of 1.82 to 1 on the Nasdaq.

The S&P Index recorded 11 new highs in 52 weeks and two new lows, while the Nasdaq recorded 116 new highs and 17 new lows. (Additional reporting by Lisa Pauline Mattackal in Bengaluru; edited by Shounak Dasgupta)