* FOMC's two-day meeting starts Tuesday
* Three major Wall Street indexes hit new highs
* Caterpillar rises after brokerage upgrade
* Orbital ATK jumps on Northrop Grumman's $7.8 bln buyout deal
* Indxes up: Dow 0.32 pct, S&P 0.23 pct, Nasdaq 0.32 pct (Adds details, comment, updates prices)
Sept 18 (Reuters) - Wall Street hit new life highs on Monday powered by financials, technology and industrials stocks even as investors await cues from the Federal Reserve on its future path of monetary policy.
Shares of the major banks Bank of America, Morgan Stanley and Citigroup were up more than 1 percent.
Boeing and Caterpillar rose more than 1 percent, providing the biggest boosts to the Dow, while Nvidia's near 5 percent increase pushed the Nasdaq higher.
The major indexes have been breaking new highs, with the Dow recording its best weekly gains this year and the S&P, its second best.
"Market continues to firm up. We could be experiencing what's known as a robust return environment," said Ronald Sanchez, chief investment officer at Fiduciary Trust Company International in New York.
A relatively quiet North Korea and U.S. Secretary of State Rex Tillerson's recent comments on "peaceful solution" also led investors back to riskier assets.
Investor focus will shift to the Federal Open Market Committee's two-day meeting, which starts on Tuesday.
The meeting is unlikely to result in an interest rate increase, but investors will focus on how Fed Chair Janet Yellen views recent inflation readings for clues on the timing of further rate hikes.
Persistently weak readings of inflation that have remained below the Fed's 2 percent target rate have been a concern for policymakers.
However, a stronger-than-expected rise in consumer prices in August triggered a more than 50 percent rise in the odds of a December rate hike, according to CME Group's FedWatch tool.
"The trend in inflation has taken a downtick. I think she (Yellen) will need a little more evidence on the inflation side over the next month or two to have some conviction about moving rates in December," Sanchez said.
The central bank is also expected to announce plans to begin unwinding its $4.2 trillion portfolio of Treasuries and mortgage-backed securities, nearly a decade after the global financial crisis.
At 10:59 a.m. ET (1459 GMT), the Dow Jones Industrial Average was up 71.16 points, or 0.32 percent, at 22,339.5, the S&P 500 was up 5.83 points, or 0.233179 percent, at 2,506.06 and the Nasdaq Composite was up 20.94 points, or 0.32 percent, at 6,469.41.
Ten of the 11 major S&P sectors were higher, led by a 0.59 percent gain in the financial index.
Financial stocks benefited from a rising U.S. Treasury yields, with the yield on benchmark 10-year notes at 2.222 percent.
Among stocks, Orbital ATK jumped 20.69 percent after Northrop Grumman said it would buy the missile and rocket maker for about $7.8 billion in cash. Northrop's shares inched up 1.54percent.
Advancing issues outnumbered decliners on the NYSE by 1,723 to 996. On the Nasdaq, 1,851 issues rose and 902 fell. (Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)