US STOCKS-Wall St rises as mood on trade again turns optimistic, nears record high

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* Trump says trade talks to restart, will meet with Xi
* Tech boosts S&P 500; trade-sensitive industrials jump
* Defensive stocks decline among 11 S&P sectors
* Two-day Fed policy meeting in focus
* Indexes jump: Dow 1.46%, S&P 1.12%, Nasdaq 1.60%

(Updates to afternoon)
By Noel Randewich
June 18 (Reuters) - Wall Street surged on Tuesday and the
S&P 500 approached a record high after Washington rekindled
trade talks with Beijing, boosting sentiment along with growing
investor confidence that the Fed will cut interest rates this
year.
President Donald Trump said he would meet with Chinese
President Xi Jinping at the G20 summit later this month, and
said talks between the two countries would restart after a
recent lull. Global stock markets have rallied and retreated repeatedly
in recent months in reaction to comments from Trump about the
progress - or lack of progress - in negotiating an end to the
trade conflict. Trump's statement on Tuesday pushed up
trade-sensitive industrials .SPLRCI up 2.0% and technology
stocks .SPLRCT gained 1.9%. Together, they were the biggest
boost to the benchmark index .SPX .
Chip companies, which have a sizable revenue exposure to
China, led the rally in tech stocks, with the Philadelphia
Semiconductor index .SOX surging 4.8%.
"We can't discount how big a deal it is for China and the
U.S. not to go into a prolonged trade spat. I don't think we're
out of the woods yet, though," said King Lip, chief investment
strategist at Baker Avenue Asset Management in San Francisco.
"I'd wait for the G20 meeting to see actual discussions
coming out of that before we go back into a risk-on mode," he
said.
The U.S.-China trade war and its impact on economic growth
has investors increasingly expecting the Federal Reserve will
cut rates to preserve the U.S. economic expansion, which would
be the longest on record this summer.
The Fed is widely expected to leave interest rates unchanged
at its two-day policy meeting that ends Wednesday, while laying
the foundation for a cut later this year. The Fed is scheduled
to release its statement at 2 p.m. (1800 GMT) on Wednesday and
Chairman Jerome Powell will hold a press conference shortly
after. The S&P 500 has gained 6% so far this month, and is only
about 1% from the all-time high hit in early May.
Comments by European Central Bank President Mario Draghi
indicating the possibility of fresh rate cuts or asset purchases
also lifted sentiment. At 2:37 p.m. ET, the Dow Jones Industrial Average .DJI
was up 1.46% at to 26,494.54, while the S&P 500 .SPX gained
1.12% to 2,922.14. The Nasdaq Composite .IXIC added 1.6% to
7,970.33.
Apple Inc AAPL.O , Amazon.com Inc AMZN.O and Microsoft
Corp MSFT.O rose between 1% and 2.5%, contributing the most to
gains in the S&P 500 and Nasdaq.
Boeing Co BA.N jumped 4.7%, buoying the Dow, after the
planemaker received an order for its 737 MAX jets valued at more
than $24 billion at list prices; the 737 MAX has been grounded
since March after two deadly crashes.
The utilities .SPLRCU , real estate .SPLRCR and consumer
staples .SPLRCS sectors, all of which are viewed as defensive,
were the only decliners.
Advancing issues outnumbered declining ones on the NYSE by a
3.12-to-1 ratio; on Nasdaq, a 2.73-to-1 ratio favored advancers.
The S&P 500 posted 57 new 52-week highs and one new low; the
Nasdaq Composite recorded 82 new highs and 37 new lows.