US STOCKS-Wall St jumps on U.S.-China trade deal optimism

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* S&P 500, Dow set to snap three-week losing streak

* Eyes on Trump meeting with Chinese vice premier

* Indexes up: Dow 1.8%, S&P 500 1.7%, Nasdaq 2% (Updates to late afternoon)

By Caroline Valetkevitch

NEW YORK, Oct 11 (Reuters) - U.S. stocks rose sharply on Friday as hopes grew that the talks between President Donald Trump and Chinese Vice Premier Liu He would culminate in a partial trade deal and delay planned U.S. tariff increases.

Cyclicals were among the day's best-performing groups, with industrials and others up more than 2% ahead of the third-quarter earnings season set to begin next week. Also, shares of Apple Inc hit a record high.

The Trump-Liu meeting was set for this afternoon in the White House. Top-level discussions between the two countries concluded their second day on Friday.

"There's marginal progress with trade, it looks like," Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta.

That, along with other factors, is boosting stocks, he said. "It reinforces our view that the path of least resistance is forward for the market."

The S&P 500 and Dow Jones indexes looked set to break a three-week losing streak on optimism that the world's top two economies could cool off their row before more U.S. tariffs kick in next week.

The Dow Jones Industrial Average rose 476.31 points, or 1.8%, to 26,972.98, the S&P 500 gained 51.14 points, or 1.74%, to 2,989.27 and the Nasdaq Composite added 158.41 points, or 1.99%, to 8,109.20.

The S&P 500 bank index jumped on expectations that strength in mortgage banking and cheap valuations could provide support to some of the biggest U.S. lenders.

However, analysts expect S&P 500 earnings dropped 3.2% year-on-year in the third quarter, which would mark the first decline since 2016, according to IBES data from Refinitiv.

Bets for another interest rate cut by the Federal Reserve fell after data showed a rise in consumer sentiment for the month of October.

Apple rose as Wedbush raised its price target, citing confidence in the company's new video streaming service.

The industrial index was boosted by a surge in shares of Fastenal Co after the industrial distributor beat quarterly profit expectations.

Advancing issues outnumbered declining ones on the NYSE by a 3.86-to-1 ratio.

The S&P 500 posted 26 new 52-week highs and no new lows; the Nasdaq Composite recorded 43 new highs and 49 new lows. (Additional reporting by April Joyner in New York and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta and Louise Heavens)