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* Xinhua says trade talks making progress
* Boeing shares gain
* Chip stocks rally on trade optimism, Broadcom results
* Indexes up: Dow 0.6 pct, S&P 500 0.6 pct, Nasdaq 0.9 pct (Updates to late afternoon)
By Caroline Valetkevitch
NEW YORK, March 15 (Reuters) - U.S. stocks rose on Friday, led by technology companies, as sentiment was lifted by an upbeat note in trade talks between the United States and China.
China's state-run Xinhua news agency said Washington and Beijing were making further substantive progress on trade talks. The report came as a relief after news that a summit to seal a deal between the two sides will not happen at March-end.
Chipmakers, which get a large portion of their revenue from China, rose, with the Philadelphia SE chip index up 3 percent, while the broader technology sector rose 1.6 percent.
"I think investors are expecting we're going to get a deal with China," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. "That's still kind of rumbling around in the background, and also investors are warming up to the idea that central banks have taken a huge step backward in terms of tightening."
U.S. data showed manufacturing output fell for a second straight month in February and factory activity in New York state was weaker than expected this month.
That followed a batch of weak data this week that underscored the Federal Reserve's dovish stance on future interest rate hikes.
Broadcom Inc jumped nearly 8.2 percent and was among the biggest boosts to the S&P and Nasdaq, after the company's quarterly profit beat analysts' estimates.
The Dow Jones Industrial Average rose 128.52 points, or 0.5 percent, to 25,838.46, the S&P 500 gained 14 points, or 0.50 percent, to 2,822.48 and the Nasdaq Composite added 68.89 points, or 0.9 percent, to 7,699.80.
Photoshop maker Adobe Inc, which also reported late Thursday, fell 4.5 percent after its current-quarter revenue forecast fell below analysts' estimates.
Boeing Co rose 1.9 percent after the company said a software upgrade for the 737 MAX aircraft will be rolled out in the coming weeks.
Shares of the world's largest planemaker have tumbled about 11 percent since its 737 MAX jets were grounded globally following a fatal crash involving one of its planes in Ethiopia on Sunday.
Facebook Inc shares were down 2.5 percent after the social media giant said late Thursday that Chief Product Officer Chris Cox would be leaving the company.
The stock briefly added to losses and Google-parent Alphabet lost ground after the Washington Post reported that U.S. state attorneys general are signaling they are willing to take action against those and other companies.
Advancing issues outnumbered declining ones on the NYSE by a 2.10-to-1 ratio; on Nasdaq, a 1.83-to-1 ratio favored advancers.
The S&P 500 posted 60 new 52-week highs and no new lows; the Nasdaq Composite recorded 82 new highs and 35 new lows. (Additional reporting by Amy Caren Daniel and Medha Singh in Bengaluru; Editing by Shounak Dasgupta and Dan Grebler)