* March U.S. manufacturing data beats estimates
* U.S. retail sales fall unexpectedly in February
* Chipmakers rally on positive China data
* Lyft drops below IPO price on second day of trading
* Indexes up: Dow 0.77 pct, S&P 0.74 pct, Nasdaq 0.70 pct (Updates to open)
By Sruthi Shankar
April 1 (Reuters) - Wall Street surged on Monday as upbeat manufacturing data out of the United States and China, as well as further hints of progress in U.S.-China trade talks helped extend last quarter's buoyant mood.
U.S. stocks ended the first quarter on a strong note on Friday, with the S&P 500 logging its best quarter since 2009 as investors bet the United States and China will strike a deal to end their protracted trade war.
The benchmark index, which is trading 2.5 percent away from its record closing high hit in September, triggered a "golden cross" pattern, in which the 50-day moving average crosses above the 200-day moving average.
Many investors believe the technical signal could portend more gains for stocks in the short term.
Spurring gains in global stock markets, China's manufacturing sector unexpectedly returned to growth for the first time in four months in March, in a sign that government stimulus measures may be slowly gaining traction.
U.S. manufacturing numbers also came in better-than-expected, helping investors overlook soft retail sales data.
"Better manufacturing data out of China over the weekend has helped push equity markets into to the 'black' on day one of a new quarter," Dean Popplewell, vice president of market analysis at Oanda said.
Technology and financial stocks provided the biggest boost to the S&P 500. Chipmakers, which get a large part of revenue from China, also rose. The Philadelphia Semiconductor index jumped 1.43 percent.
Bank stocks rose more than 2 percent, while gains of more than 1 percent were seen in industrial, energy and material sectors.
Defensive utilities and real estate were the only two sectors trading lower among the 11 major S&P sectors.
At 10:12 a.m. ET, the Dow Jones Industrial Average was up 199.40 points, or 0.77 percent, at 26,128.08, the S&P 500 was up 20.89 points, or 0.74 percent, at 2,855.29 and the Nasdaq Composite was up 53.73 points, or 0.70 percent, at 7,783.05.
Economic data came as a relief to markets concerned about a global growth slowdown after the Federal Reserve abruptly ended its monetary tightening policy cycle, driving the 10-year U.S. bond yields below 3-month T-bill rates for the first time in more than a decade.
China's State Council said on Sunday it would continue to suspend additional tariffs on U.S. vehicles and auto parts after April 1, in a goodwill gesture following a U.S. decision to delay tariff hikes on Chinese imports.
General Motors Co rose 1.6 percent and Ford Motor Co was up 1.9 percent.
Wynn Resorts Ltd jumped 6.7 percent, the most among S&P companies, as March gambling revenue from the Chinese territory of Macau was higher than the previous month. Shares of MGM Resorts International rose 3.2 percent and Las Vegas Sands Corp climbed 3.3 percent.
Lyft Inc shares fell 9.2 percent as brokerage Guggenheim Securities started coverage of the ride-hailing startup's shares with a 'neutral' rating. The company debuted on the Nasdaq on Friday.
Advancing issues outnumbered decliners for a 3.47-to-1 ratio on the NYSE and a 2.46-to-1 ratio on the Nasdaq.
The S&P index recorded 57 new 52-week highs and no new low, while the Nasdaq recorded 54 new highs and 9 new lows. (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)