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* Trump says trade talks to restart, will meet Xi
* Tech boosts S&P; trade-sensitive industrials jump
* Defensive stocks decline among 11 S&P sectors
* Two-day Fed policy meeting in focus
* Indexes up: Dow 1.34%, S&P 1.09%, Nasdaq 1.57%
(Updates to early afternoon)
By Shreyashi Sanyal and Aparajita Saxena
June 18 (Reuters) - Wall Street's main indexes rallied on Tuesday,
with the S&P 500 inching close to record levels, as President
Donald Trump's comments on restarting trade talks with China added to
optimism of a more accommodative Federal Reserve.
Trump said he would meet with Chinese President Xi Jinping at the
G20 summit later this month, and that talks between the two countries
would restart after a long lull.
Trade-sensitive industrials jumped 1.72%, while technology
stocks gained 1.84%, the biggest boost to the benchmark index .
Chip companies, which have a sizable revenue exposure to China,
led the rally among tech stocks, with the Philadelphia Semiconductor
index surging 4.23%.
"It's quite clear now that this is a major potential headwind
for markets and any positive sounding news like this will likely
inspire relief rallies," said Craig Erlam, senior market analyst
at OANDA in London.
"That's not to say talks will be successful but investors may
be feeling more optimistic this morning than they were a day ago."
The drawn out U.S.-China trade war and its impact on economic
growth had investors betting that the Fed would cut rates to preserve
the current U.S. economic expansion, which would be the longest on
record this summer.
The central bank is expected to leave interest rates unchanged at
its two-day policy meeting ending Wednesday, but is widely seen as
laying the foundation for a cut later this year.
The Fed is scheduled to release its statement at 2 p.m. EDT (1800
GMT) on Wednesday and Chairman Jerome Powell will hold a press
conference shortly after.
The S&P 500 has gained 5% so far this month on rate cut
expectations, putting the benchmark index just 1% away from its
all-time high hit in early May.
"Fed's main task will be the same as always: Carefully craft
its language as to not disappoint markets. 'Yes, we may not cut right
away, but don't worry, anything goes wrong we'll be right there to
save you'," said Craig Kirsner, president at Stuart Estate
Planning Wealth Advisors in Coconut Creek, Florida.
Lifting sentiment was European Central Bank President Mario
Draghi's comments indicating a possibility of fresh rate cuts or asset
At 12:56 p.m. ET, the Dow Jones Industrial Average was up
350.68 points, or 1.34%, at 26,463.21 and the S&P 500 was up 31.46
points, or 1.09%, at 2,921.13.
The Nasdaq Composite was up 122.95 points, or 1.57%, at 7,967.98.
Large-cap favorites such as Apple Inc , Amazon.com Inc ,
Microsoft Corp rose between 1.5% and 2.5%, lifting the Nasdaq higher.
Boeing Co jumped 4.20%, buoying the Dow, after the planemaker
received an order for its grounded 737 MAX jets valued at more than
$24 billion at list prices.
Only the defensive utilities , real estate
and consumer staples sectors were the decliners.
Advancing issues outnumbered decliners by a 3.33-to-1 ratio on the
NYSE and by a 2.78-to-1 ratio on the Nasdaq.
The S&P index recorded 57 new 52-week highs and one new low,
while the Nasdaq recorded 77 new highs and 33 new lows.
(Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru;
Editing by Sriraj Kalluvila)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780 ; Reuters