US STOCKS-Wall St rallies on trade deal hopes, focus shifts to Trump-Liu meeting

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* S&P 500, Dow set to snap three-week losing streak
* Trump to meet Chinese vice premier at 2:45 p.m. ET
* Apple hits record high on trade, Wedbush PT bump
* Indexes up: Dow 1.47%, S&P 500 1.46%, Nasdaq 1.68%

(Updates to early afternoon)
By Shreyashi Sanyal
Oct 11 (Reuters) - Wall Street rose for the third straight
session on Friday, with hopes running high that the talks
between President Donald Trump and Chinese Vice Premier Liu He
would culminate in a partial trade deal and delay planned U.S.
tariff increases.
Shares of Apple Inc AAPL.O hit a record high and were the
biggest boost to the S&P 500 and Nasdaq, while the technology
sector .SPLRCT was set for its best day in five weeks.
All eyes are now on Trump meeting Liu in the White House at
2:45 p.m. EDT (1845 GMT). The top-level discussions concluded
their second day on Friday. "The President seems to indicate that there is a possibility
of an interim trade deal," said Rick Meckler, a partner at
Cherry Lane Investments in New Vernon, New Jersey.
"The thought is that there will be some conciliatory moves
from both sides, as news earlier in the week had investors
worried that these talks might be moving in the wrong
direction."
The S&P 500 and Dow Jones indexes looked set to break a
three-week losing streak on optimism that the world's top two
economies could cool off their row before more U.S. tariffs kick
in next week.
Investors also moved into cyclical sectors such as
financials .SPSY , ahead of the third-quarter earnings season
set to begin with banks reporting next week.
The S&P 500 bank index .SPXBK jumped 2.5%, on track for
its best day in a month, on expectations that strength in
mortgage banking and cheap valuations could provide support to
some of the biggest U.S. lenders. However, analysts see S&P 500 earnings dropping 3.2%
year-on-year, marking the first decline since 2016, according to
IBES data from Refinitiv.
Bets for another interest rate cut by the Federal Reserve
fell amid data showing a rise in consumer sentiment for the
month of October. Chipmakers with a sizeable exposure to China rose in early
trading, with the Philadelphia Semiconductor index .SOX
gaining 2.5%.
Apple rose 2% as Wedbush raised its price target, citing
confidence in the company's new video streaming service.
At 12:30 p.m. ET the Dow Jones Industrial Average .DJI was
up 389.01 points, or 1.47%, at 26,885.68, the S&P 500 .SPX was
up 43.03 points, or 1.46%, at 2,981.16 and the Nasdaq Composite
.IXIC was up 133.54 points, or 1.68%, at 8,084.33.
The industrial sector .SPLRCI gained 2.2%, boosted by a
17.2% surge in shares of Fastenal Co FAST.O after the
industrial distributor beat quarterly profit expectations.
Defensive utilities .SPLRCU was the only sector trading in
the red, while consumer staples .SPLRCS and real estate stocks
.SPLRCR posted the smallest gains, suggesting an uptick in
risk appetite.
Advancing issues outnumbered decliners for a 3.90-to-1 ratio
on the NYSE and a 4.64-to-1 ratio on the Nasdaq.
The S&P index recorded 26 new 52-week highs and no new low,
while the Nasdaq recorded 42 new highs and 38 new lows.