US STOCKS-Wall Street set to wind up pandemic year with gains

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* S&P 500 set for over 15% annual gain

* Weekly jobless claims fall for second straight week

* Indexes down: Dow 0.13%, S&P 0.11%, Nasdaq 0.30% (Adds comment; updates share prices)

By Devik Jain and Supriya R

Dec 31 (Reuters) - The benchmark S&P 500 and the tech-heavy Nasdaq were set to end a year ravaged by the COVID-19 pandemic with strong gains, thanks to unprecedented stimulus and vaccine rollouts that have boosted hopes of an economy recovery.

After surging to record highs this week in a solid recovery since March when the pandemic triggered the steepest global recession in generations and left millions of Americans unemployed, Wall Street's three main indexes eased just a bit on Thursday.

"It's end-of-year optimism and the market is looking ahead after a tumultuous trading year, given the COVID, the election and the Fed," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

The S&P 500 .SPX has climbed almost 70% from its March low, putting it on course for a more than 15% yearly gain.

Seven of the sectors are on track to gain for the year with tech .SPLRCT set to be the best performer with a more than 41% jump, while energy .SPNY on course for its biggest yearly collapse in history.

The Nasdaq .IXIC was set to record a 43% jump in what could be its best yearly performance since 2009, benefiting from a surge in tech mega-caps such as Alphabet Inc GOOGL.O , Microsoft Corp MSFT.O , Apple Inc AAPL.O , Facebook Inc FB.O and Netflix Inc NFLX.O .

The NYSE FANG+TM index .NYFANG has more than doubled in value this year.

The blue-chip Dow .DJI is also tracking a modest 6.4% gain for the year.

"We have several of vaccines and it's a general feeling of hope this country and the rest of the world will pull out of this and the economic activity although greatly damaged, will be back on track sooner than people have predicted," Bakhos said.

Meanwhile, a U.S. Labor Department report showed the number of Americans filing claims for jobless benefits fell for the second straight week, but remained elevated more than nine months into the economic crisis. expectations of bigger stimulus checks dimmed after Senate Majority Leader Mitch McConnell blocked a quick vote on Wednesday to back President Donald Trump's call to increase COVID-19 relief checks to $2,000 from $600.

Risk assets rallied in November following a favorable U.S. election outcome and optimism around vaccines rollouts, but the momentum stalled on worries over fresh fiscal stimulus and a new, highly infectious COVID-19 variant spreading globally. eyes are on two U.S. Senate races in Georgia next week that will determine control of the chamber and influence Democratic President-elect Joe Biden's ability to enact his agenda. 11:56 a.m. ET, the Dow Jones Industrial Average .DJI was down 39.32 points, or 0.13%, at 30,370.24, the S&P 500 .SPX was down 3.94 points, or 0.11%, at 3,728.10, and the Nasdaq Composite .IXIC was down 38.54 points, or 0.30%, at 12,831.46.

Six of the major S&P 500 sectors edged lower, with energy .SPNY , industrials .SPLRCI and materials .SPLRCM falling after recent gains.

Trading volumes are likely to remain light on New Year's Eve and the markets will remain closed on Friday.

Shares of Tribune Publishing Co TPCO.O rose 9.4% after its largest shareholder, Alden Global Capital, offered to take full control of the owner of the Chicago Tribune in a deal that values the newspaper chain at $520.6 million. issues outnumbered advancers for a 1.02-to-1 ratio on the NYSE, and for a 1.54-to-1 ratio on the Nasdaq.

The S&P index recorded 11 new 52-week highs and no new lows, while the Nasdaq recorded 88 new highs and 13 new lows.