US STOCKS-Stimulus, vaccine hopes drive S&P 500 to 10-week high

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* Delta Air Lines to resume flying major routes in June
* S&P 500 eyes best day in nearly 5 weeks
* Carmakers rise as factories set to reopen
* Cyclicals lead gains among major S&P sectors
* Indexes jump: Dow 3.54%, S&P 3.07%, Nasdaq 2.35%

(Updates to early afternoon)
By Medha Singh and Ambar Warrick
May 18 (Reuters) - U.S. stocks surged on Monday, with the
S&P 500 hitting a 10-week high, as encouraging early data from a
potential coronavirus vaccine trial boosted sentiment, with
investors also hoping for stimulus to cushion the economic blow
from the pandemic.
Drugmaker Moderna Inc MRNA.O said its experimental
COVID-19 vaccine showed promising results in a small early-stage
trial, boosting futures in premarket trading. Its own shares
jumped 24.7%. After surging about 34% from a multi-year low hit in March,
the S&P 500 has traded in a tight range this month as investors
weighed hopes of an economic recovery and fears of another wave
of infection as states lifted virus-led restrictions.
"If there really is a workable vaccine that can be mass
produced, it really is a game changer for so many industries
about which we weren't so sure if the reopenings would solve
their problems," said Rick Meckler, a partner at Cherry Lane
Investments in New Vernon, New Jersey.
Battered travel-related stocks such as cruise line operators
Carnival Corp CCL.N , Royal Caribbean Cruises Ltd RCL.N and
Norwegian Cruise Line Holdings Ltd NCLH.N jumped 16% to 18.4%.
The airlines subindex .SPCOMAIR added 12.8% as Delta Air
Lines DAL.N said it would resume flying several major routes
in June. Markets also took heart from Federal Reserve Chair Jerome
Powell's remarks over the weekend on a gradual economic recovery
and his affirmation that more monetary stimulus was on the way
if required.
He stressed on the importance of a vaccine in establishing
economic normalcy as well. Investors now await his address
before the Senate Banking Committee on Tuesday to discuss how
economic rescue efforts are working.
"True recovery would come above 3,000 points (on the S&P
500), and that's going to be several factors coming together, in
sense of the economy opening back up again, knowing that Powell
is waiting to help at any moment, and we have the vaccine," said
Andre Bakhos managing director at New Vines Capital LLC in
Bernardsville, New Jersey.
At 13:01 p.m. ET, the Dow Jones Industrial Average .DJI
was up 838.57 points, or 3.54%, at 24,523.99, the S&P 500 .SPX
was up 87.99 points, or 3.07%, at 2,951.69. The Nasdaq Composite
.IXIC was up 212.15 points, or 2.35%, at 9,226.71.
The benchmark S&P 500 was on track for its biggest one-day
percentage gain in five weeks, with all the 11 major S&P sector
indexes trading higher.
Cyclical plays were in favor with energy .SPNY and
materials .SPLRCM sectors climbing 7.1% and 4.6%,
respectively, as a gradual recovery in economic activity pointed
to more demand for oil and industrial materials. O/R
General Motors Co GM.N rose 9.9% and Ford Motor Co F.N
7.6% as they prepared to reopen their North American factories
in a push to restart work in an industry that accounts for about
6% of U.S. economic activity. Advancing issues outnumbered decliners by a 8.38-to-1 ratio
on the NYSE and by a 4.58-to-1 ratio on the Nasdaq.
The S&P index recorded 22 new 52-week highs and no new lows,
while the Nasdaq recorded 84 new highs and six new lows.