(Corrects headline to say S&P looks set to snap three-week, not four-week, losing streak and to drop reference to Dow. Also corrects to “four” weeks from “five” in paragraphs 1 and 2; removes bullet point on Nasdaq)
* InterOil jumps on $2.2 bln takeover offer
* Applied Materials soars; boosts semiconductor stocks
* Indexes up: Dow 0.6 pct, S&P 0.76 pct, Nasdaq 1.37 pct
By Yashaswini Swamynathan
May 20 (Reuters) - U.S. stocks were higher in early afternoon trading on Friday, with the S&P on track to eke out its first weekly gain in four weeks as technology and financial stocks rose.
The tech-heavy Nasdaq Composite index was up 1.13 percent and was on track to end four straight weeks of losses, boosted by gains in Microsoft and Apple.
The S&P financial sector index rose 0.91 percent as a flurry of comments from U.S. Federal Reserve officials, suggested a possibility of an interest rate hike as early as June.
The index has risen about 2 percent since the Fed released minutes of its April meeting on Wednesday.
New York Fed President William Dudley said on Thursday the U.S. economy was strong enough to warrant a rate hike in June or July.
“The markets are re-dialing from the sell-off, and I would say it is doing so more on the absence of any incremental bad news from the Fed,” said James Abate, chief investment officer as Centre Asset Management in New York.
“I think on technology a lot of that was driven by the positive news that came out of Applied Materials, which is essentially being a spark for the rally.”
Chip industry bellwether Applied Materials was the biggest gainer on the S&P information technology sector after its higher-than-expected forecast.
The benchmark S&P 500 index has fallen 4.4 percent up to Thursday’s close, since hitting a record high on May 21, 2015.
At 12:25 p.m. ET (1625 GMT) the Dow Jones industrial average was up 105.47 points, or 0.6 percent, at 17,540.87, the S&P 500 was up 15.47 points, or 0.76 percent, at 2,055.51 and the Nasdaq Composite was up 64.50 points, or 1.37 percent, at 4,777.03.
The gains were broad-based with eight of the 10 major S&P sectors trading higher.
Data on Friday showed existing home sales in the United States rose more than expected in April, marking the second straight month of increase.
InterOil jumped 39 percent to $44.10 after Oil Search agreed to buy the company for $2.2 billion.
Deere & Co’s shares fell 4.9 percent to $78.25 after the farm equipment maker cut its full-year profit outlook.
Campbell Soup was down 6.4 percent at $59.83 after the company reported lower-than-expected quarterly sales.
Advancing issues outnumbered decliners on the NYSE by 2,345 to 602. On the Nasdaq, 2,167 issues rose and 518 fell.
The S&P 500 index showed 12 new 52-week highs and one new low, while the Nasdaq recorded 29 new highs and 22 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D’Silva)