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US STOCKS-Tech stocks boost Wall St as reports bolster hopes of trade deal

Arjun Panchadar

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* Beijing open to agreeing to partial trade deal - BBG

* China offering extra U.S. agriculture purchases - FT

* Apple, Microsoft biggest boost to S&P 500

* J&J drops after jury says company must pay $8 bln in damages

* Indexes up: Dow 0.61%, S&P 500 0.73%, Nasdaq 0.83% (Updates to open)

Oct 9 (Reuters) - A rally in technology stocks boosted Wall Street on Wednesday, as investors cheered media reports signaling an ease in trade tensions between the United States and China ahead of high-level talks starting Thursday.

Shares of Microsoft Corp and Apple Inc rose 1% and were the biggest boost to the S&P 500. The technology sector rose 1.24%.

Chipmakers with a sizable exposure to China also gained, with the Philadelphia SE Semiconductor index up 1.68%.

China was still open to agreeing to a partial trade deal with the United States, despite the inclusion of top Chinese artificial intelligence startups in a trade blacklist, according to a Bloomberg report.

Separately, the Financial Times said Beijing was offering to increase its annual purchases of U.S. agricultural products.

"There are expectations that some sort of an interim deal will emerge from these meetings," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "Investors certainly seem more hopeful now than they did two days ago."

Escalating trade tensions, intensifying efforts to impeach President Donald Trump and signs of slowing economic growth rocked equity markets in October, with the S&P 500 and Dow Jones indexes off more than 2% since the end of September.

A sharp contraction in U.S. manufacturing data, as well as a dismal reading on business activity last week has raised bets of a third interest rate cut by the Federal Reserve this year.

Fed Chair Jerome Powell flagged openness to further rate cuts on Tuesday, repeating that the central bank would act "as appropriate" amid an economy that he said was likely to continue to expand.

The session's gains were broad-based, with all the major S&P 500 sectors trading higher and 29 of the 30 components of the blue-chip Dow Jones Industrial Average index in positive territory, with only Johnson & Johnson declining.

The drugmaker's shares fell 1.4% after a jury awarded $8 billion in punitive damages to a man who accused it of failing to warn that young men using its antipsychotic drug Risperdal could grow breasts.

Energy stocks also gained 1.2%, tracking an increase in oil prices.

Investors will now turn their eye to the third-quarter earnings season, which begins next week with U.S. banks reporting to gauge the health of the domestic economy.

Analysts expect the worst quarterly profit performance since 2016, with earnings for S&P 500 companies estimated to fall 3.1% from a year earlier, based on IBES data from Refinitiv.

At 10:22 a.m. ET the Dow Jones Industrial Average was up 159.15 points, or 0.61%, at 26,323.19, the S&P 500 was up 21.15 points, or 0.73%, at 2,914.21 and the Nasdaq Composite was up 65.10 points, or 0.83%, at 7,888.88.

Shares in Netflix Inc fell 1.4%, the most on the S&P 500, after two brokerages cut price targets on the video streaming service provider's shares.

Advancing issues outnumbered decliners for a 2.95-to-1 ratio on the NYSE and a 2.20-to-1 ratio on the Nasdaq.

The S&P index recorded seven new 52-week highs and five new lows, while the Nasdaq recorded four new highs and 54 new lows. (Reporting by Arjun Panchadar and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)