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US STOCKS-Wall Street ends higher on hope that partial coronavirus stimulus deal may occur

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* Airlines rise after Trump’s call for support

* Fed minutes show policymakers split on applying new framework

* Indexes: Dow up 1.9%, S&P 500 up 1.7%, Nasdaq up 2% (Updates close with volume, other details)

Oct 7 (Reuters) - U.S. stocks closed sharply higher on Wednesday as investors regained hope that at least a partial deal on more U.S. fiscal stimulus may happen.

After abruptly calling off negotiations on a comprehensive bill on Tuesday, President Donald Trump later that day urged Congress to pass a series of smaller, standalone bills that would include a bailout package for the airline industry battered by the coronavirus pandemic.

Airline shares jumped, and United Airlines rose 4.3%.

“The only reason we were down yesterday was the tweet from President Trump, which he walked back last night. That’s why the market started off stronger and continued stronger. I think there’s full-blown expectations that some form of stimulus agreement is going to occur sooner than later,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

Top White House officials downplayed the possibility of more coronavirus relief, while House Speaker Nancy Pelosi disparaged Trump for backing away from talks on a comprehensive deal.

Indexes held gains after the Federal Reserve released minutes from its last policy meeting. The minutes showed U.S. central bankers, having agreed unanimously in August on a broad new approach to monetary policy, were divided in September over how to apply their new principles in practice.

The Dow Jones Industrial Average rose 530.7 points, or 1.91%, to 28,303.46, the S&P 500 gained 58.5 points, or 1.74%, to 3,419.45 and the Nasdaq Composite added 210.00 points, or 1.88%, to 11,364.60.

Eli Lilly and Co rose 3.4% after saying it had submitted a request to the U.S. Food and Drug Administration for emergency use of its experimental COVID-19 antibody treatment.

With the U.S. presidential election just weeks away, focus later Wednesday may turn to a debate between Vice President Mike Pence and Democratic opponent Kamala Harris.

Reuters/Ipsos opinion polls released on Tuesday showed Democratic presidential candidate Joe Biden expanding his lead over Trump in battleground Michigan and the two candidates locked in a toss-up race in North Carolina ahead of the Nov. 3 election.

“People are becoming more comfortable with the lead that Biden has and focusing on the potential positives that would come from a Democratic White House and not the stereotypical (view of) negative for the stock market that was maybe in vogue three months ago,” James said.

Investors also are preparing to hear from companies soon on the third quarter, with earnings expected to kick off next week. Analysts expect earnings at S&P 500 companies to have dropped about 21% in the quarter from a year ago, according to IBES data from Refinitiv.

Advancing issues outnumbered declining ones on the NYSE by a 2.77-to-1 ratio; on Nasdaq, a 3.32-to-1 ratio favored advancers.

The S&P 500 posted 40 new 52-week highs and no new lows; the Nasdaq Composite recorded 125 new highs and 16 new lows.

Volume on U.S. exchanges was 8.98 billion shares, compared with the 9.79 billion average for the full session over the last 20 trading days. (Additional reporting by Devik Jain and Sagarika Jaisinghani in Bengaluru; Editing by Cynthia Osterman)

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