* Fed's John Williams sees 2-3 rate hikes in 2016
* Yellen to speak later in the week
* Monsanto jumps after Bayer's $62 bln buyout offer
* Indexes: Dow up 0.27 pct, S&P up 0.09 pct, Nasdaq up 0.29 pct (Updates to afternoon)
By Noel Randewich
May 23 (Reuters) - Wall Street edged higher on Monday as a bounce in Apple helped offset growing concerns that the U.S. Federal Reserve could raise interest rates sooner than later.
The timing of future Fed rate hikes in the face of a sluggish economy is a major focus among stock investors who have benefited from historically low borrowing costs since the 2008 financial crisis.
San Francisco Fed President John Williams and his St. Louis counterpart, James Bullard, both struck hawkish tones in separate appearances on Monday.
Last week, investors were surprised at central bank minutes that opened the door to a rate hike as soon as June. Investors will listen for fresh clues to the Fed's intentions when Chair Janet Yellen speaks on Friday.
"The market needs to be coddled and gently eased into a slightly higher interest-rate environment, and that appears to be what the Fed is doing," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
Apple rose 1.60 percent and the Philadelphia SE Semiconductors Index added 1 percent after Taiwan's Economic Daily News reported that Apple asked suppliers to build more of its next-generation iPhones than previously expected.
At 2:42 pm, the Dow Jones industrial average was up 0.27 percent to 17,547.78 points and the S&P 500 had edged up 0.09 percent to 2,054.25.
The Nasdaq Composite added 0.29 percent to 4,783.35.
Six of the 10 major S&P sectors were higher, led by a 1.55 percent gain in the materials index. It was boosted by Monsanto's 4.88-percent jump after the U.S. seeds company received a $62 billion takeover offer from German drugs and crop chemicals group Bayer.
The largest drag on the S&P 500 was Microsoft, down 0.77 percent.
Saturday was the one-year anniversary of the S&P 500's last record high close and the index is now down some 4 percent from that peak.
Tribune Publishing fell 15.5 percent after it rejected Gannett's latest takeover offer. Gannett was down 0.9 percent.
Advancing issues outnumbered decliners on the NYSE by 1,736 to 1,219. On the Nasdaq, 1,676 issues rose and 1,101 fell.
The S&P 500 index showed six new 52-week highs and no new lows, while the Nasdaq recorded 43 new highs and 21 new lows. (Additional reporting by Tanya Agrawal; Editing by Nick Zieminski)