* Biotechs help lift S&P above milestone 2,000
* Hope for European stimulus lifts financials
* Data on service sector, housing market below forecasts
* Indexes up: Dow 0.51 pct, S&P 0.5 pct, Nasdaq 0.41 pct (Updates to early afternoon trading, changes byline)
By Chuck Mikolajczak
NEW YORK, Aug 25 (Reuters) - The S&P 500 briefly hurdled above 2,000 for the first time on Monday, with financials and biotechnology stocks lifting the benchmark index to a record as investors make equities their asset of choice.
The significance of the milestone was more psychological than fundamental, and it represents the high point of a six-year rally that has boosted retirement accounts for Americans from Wall Street to Main Street, though the gains have largely benefited wealthier Americans. On a total-return basis the S&P 500 has more than tripled from its 2009 low hit during the financial crisis.
The day's gains were broad, with each of the 10 primary sectors on the benchmark S&P index advancing. Advancers were comfortably outpacing decliners on both the New York Stock Exchange and Nasdaq.
"Though (S&P 2,000) is a major mile marker and enormous optical, it is very much in keeping with the general tone of how the market has behaved over the past few weeks," said Peter Kenny, chief market strategist at Clearpool Group in New York.
"In other words, it's not as if we are reaching for it, it feels as though it fits with the narrative of the market's very broad move higher."
The index has managed to climb despite cautious signals for the economy, including tepid U.S. growth, a reduction in stimulus from the Federal Reserve and a simmering conflict between Ukraine and Russia. In the latest economic data, reads on both the U.S. services sector and the housing market came in below forecasts.
Biotech stocks, which have recovered from a sharp drop earlier this year to become a primary driver of recent equity gains, continued to outperform on Monday. The Nasdaq Biotech index rose 2.4 percent and is up 8.6 percent for the month.
InterMune shares surged 35.5 percent to $72.93 to help lift the sector after it agreed to be acquired by Roche Holding AG for $8.3 billion in cash, the latest vote of confidence in a sector that many, including Federal Reserve Chair Janet Yellen, worry is overvalued.
The Dow Jones industrial average rose 86.48 points or 0.51 percent, to 17,087.7, the S&P 500 gained 10.02 points or 0.5 percent, to 1,998.42 and the Nasdaq Composite added 18.69 points or 0.41 percent, to 4,557.25.
Financial shares were among the strongest of the day, rising on expectations that Europe may see more aggressive monetary stimulus. Morgan Stanley, which has heavy exposure to Europe, rose 3 percent to $34.46 while Goldman Sachs Group Inc , a Dow component, was up 1.7 percent at $178.50. The S&P financial sector gained 1 percent.
U.S. stocks have been strong of late. Major indexes closed a third week of gains Friday, with the Dow and S&P enjoying their best weeks since April, while the S&P is on track for its seventh advance in 10 sessions.
Burger King is in talks to acquire Canadian coffee and doughnut chain Tim Hortons Inc in a deal that would be structured as a so-called tax inversion transaction to move Burger King's domicile to Canada, which has lower overall corporate taxes. Shares of Burger King jumped 21.8 percent to $33.01 while U.S. shares of Tim Hortons shot up 21.5 percent to $76.37. (Reporting by Chuck Mikolajczak; Editing by James Dalgleish)