US STOCKS-Stimulus optimism and Apple spark Wall Street rally

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* Apple jumps on report of higher iPhone production in 2021
* Technology sector seen resilient through pandemic -
analyst
* Utilities and materials sectors among strongest performers
* Indexes: Dow +1.16%, S&P 500 +1.19%, Nasdaq +0.94%

(Updates to afternoon)
By Noel Randewich and Karen Pierog
Dec 15 (Reuters) - Wall Street surged on Tuesday as optimism
about a potential government stimulus kept spirits high, while
investors bet on more signals of easy monetary policy from the
Federal Reserve's final meeting of the year.
Apple Inc AAPL.O was the top boost to all three U.S.
benchmarks, jumping 4% to its highest since September after a
report said it plans to increase iPhone production by 30% in the
first half of 2021. Some investors viewed the recent spike in coronavirus
infections and deaths as a impetus for a quick deal on a
COVID-19 stimulus bill, with economically sensitive sectors such
as consumer discretionary .SPLRCD , materials .SPLRCM leading
gains.
The S&P 500 utilities index .SPLRCU climbed 2%, on track
for its strongest one-day gain since early November.
"They have lagged, and you could see a little bit of
rotation of people looking for yield," said 6 Meridian Chief
Investment Officer Andrew Mies, referring to utilities stocks.
Broad gains across the stock market were a healthy sign,
Mies added.
U.S. House Speaker 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 relief. The Fed is also expected to signal low-interest rates for
the foreseeable future in its two-day meeting starting Tuesday.
The recent coronavirus vaccine roll-out is expected to improve
the central bank's 2021 outlook. The Dow Jones Industrial Average .DJI was up 1.16% at
30,206.61 points, while the S&P 500 .SPX gained 1.19% to
3,690.79.
The Nasdaq Composite .IXIC added 0.94% to 12,556.66.
Supported by Apple, the S&P 500 technology sector index
.SPLRCT added 1.3%. The sector has outperformed the broader
market during the pandemic and is up over 35% year to date, with
investors viewing it as resilient to virus-related disruptions.
"The market likes to go to tech when it is afraid the
economy may stall because of a rise in infections and
shutdowns," said Christopher Grisanti, chief equity strategist
at MAI Capital Management.
Increased liquidity and ultra-low lending rates have sent
investors flocking to stocks for during the COVID-19 pandemic,
while recent optimism over a vaccine pushed the S&P 500 to a
series of record highs last week.
"We remain overweight on equities and have added selective
exposure to more cyclically oriented sectors, including
industrials, materials, semiconductors, housing and consumer
durables," Erin Browne and Geraldine Sundstrom, managing
directors at investment manager PIMCO wrote in a note.
Eli Lilly and Co LLY.N jumped 5% after the company said it
would buy Prevail Therapeutics Inc PRVL.O in a deal
potentially valued at $1 billion to expand its presence in the
lucrative field of gene therapy. Prevail's shares surged about
80%. Moderna Inc's MRNA.O shares fell more than 6%, even after
U.S. Food and Drug Administration staff members did not raise
any new concerns over data on the drugmaker's COVID-19 vaccine.
A report said the vaccine will gain emergency use approval on
Friday. Advancing issues outnumbered declining ones on the NYSE by a
3.07-to-1 ratio; on Nasdaq, a 2.03-to-1 ratio favored advancers.
The S&P 500 posted 17 new 52-week highs and 2 new lows; the
Nasdaq Composite recorded 150 new highs and 17 new lows.