US STOCKS-S&P 500, Dow track second straight weekly gain on stimulus optimism

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* Investors starting to price in Biden victory - strategists
* Xilinx surges on report of buyout offer by AMD
* Materials, information technology stocks lead early gains
* Indexes up: Dow 0.30%, S&P 0.53%, Nasdaq 0.82%

(Updates to open)
By Devik Jain
Oct 9 (Reuters) - Wall Street's main indexes opened higher
on Friday, setting up the S&P 500 and the Dow for their second
straight weekly gain on hopes of more federal fiscal aid and
growing expectations of a Democratic victory in next month's
presidential election.
Eight of the 11 major S&P indexes were up in early trading,
led by materials .SPLRCM and information technology .SPLRCT .
Energy stocks .SPNY dipped, but were still set for their
biggest weekly percentage increase since June. O/R
The S&P airlines subindex .SPCOMAIR edged up 0.1% as U.S.
President Donald Trump called for a "skinny" relief bill that
would include elements such as direct payments and a bailout to
the struggling airline sector. "The market is continuing to rise on hopes of some sort of a
conclusion (on stimulus), not only to the airlines, but to the
rest of the country," said Peter Cardillo, chief market
economist at Spartan Capital Securities in New York.
Recent trading on Wall Street has been dictated by
negotiations in Washington on more fiscal stimulus as signs of a
slowdown in the domestic economic recovery sparked calls for
more aid for businesses and households.
Investors have also begun to digest the possibility of Biden
winning the Nov. 3 election after a fractious debate last month
led to a jump in his lead over Trump in several national polls.
"Some of the market sectors that would be thought of as
performing better under a Biden administration have started
pricing in a higher probability of a Biden victory," said Dan
Eye, head of asset allocation and equity at Fort Pitt Capital
Group in Harrisburg, Pennsylvania.
The S&P small- .SPCY and mid-cap .IDX indexes are on
course to end the week with gains of about 6% and 5%,
respectively, outpacing a rise of about 3.5% in the benchmark
S&P 500.
They are also on track to outperform the tech-heavy Nasdaq
.IXIC , which has surged since a coronavirus-driven crash in
March, thanks to a narrow rally in stocks of mega-cap technology
companies such as Apple Inc AAPL.O and Amazon.com Inc
AMZN.O .
At 9:50 a.m. ET, the Dow Jones Industrial Average .DJI was
up 0.30%, the S&P 500 .SPX was up 0.53% and the Nasdaq
Composite .IXIC was up 0.82%.
In company news, Xilinx Inc XLNX.O surged 12.5% after a
report said Advanced Micro Devices Inc AMD.O was in talks to
buy the chipmaker in a deal valued at more than $30 billion.
Shares of AMD fell 1.7%. General Electric Co GE.N jumped 3.1% as a report said
Goldman Sachs reinstated coverage on the U.S. industrial
conglomerate with a "buy" rating, saying the company will emerge
stronger from the COVID-19 pandemic. Advancing issues outnumbered decliners more than 2-to-1 on
the NYSE and on the Nasdaq.
The S&P index recorded 59 new 52-week highs and one new low,
while the Nasdaq recorded 91 new highs and eight new lows.