Investors bet technology stocks would benefit from President-elect Barack Obama's proposed economic plan that would include the largest U.S. infrastructure investment since the 1950s.

The Federal Reserve, in minutes from its December 15-16 meeting, warned of uncomfortably low levels of inflation and said the economic outlook will be weak for some time.

"The more information the market sees about just about how bad the economy is simply increases the probability that the stimulus package will not just be passed, but ultimately be deployed in the size the new president wants," said Craig Peckham, equity trading strategist at Jefferies & Co. in New York.

The Dow Jones industrial average <.DJI> was up 101.71 points, or 1.14 percent, at 9,054.60. The Standard & Poor's 500 Index <.SPX> was up 11.85 points, or 1.28 percent, at 939.30. The Nasdaq Composite Index <.IXIC> was up 32.74 points, or 2.01 percent, at 1,660.77.

Technology shares, which are seen as better prepared to weather the economic downturn due to large cash reserves, were a particular bright spot. International Business Machines Corp and Hewlett-Packard Co pushed the Dow higher, rising 3.6 percent and 7.8 percent respectively.

However, after initially rising and helping to lift the Nasdaq in the wake of an Oppenheimer & Co upgrade, shares of Apple Inc retreated as its performance at the Macworld expo in San Francisco disappointed investors. Apple, which had previously introduced the iPhone at Macworld, frustrated investors with its lack of big news.

Shares of Apple fell 0.7 percent to $93.95.

(Editing by Leslie Adler)