US STOCKS-Wall St up sharply ahead of Powell testimony

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* Focus on Fed chief's testimony, inflation data this week

* U.S. bond yields, VIX ease further from peaks

* Berkshire Hathaway gains on Buffett's buyback comments

(Updates to early afternoon)

By Sruthi Shankar

Feb 26 (Reuters) - U.S. stocks rose sharply on Monday, led by gains across sectors as investors bet that Federal Reserve Chairman Jerome Powell will stick to a gradual rate-hike approach despite indications that inflation is perking up.

Powell faces questions from both houses of the U.S. Congress in a semi-annual testimony starting on Tuesday, his first major set piece since he took over from Janet Yellen earlier this month. urn:newsml:reuters.com:*:nL2N1QD0Z5

His testimony comes at a time when investors have been anxious about the pace of rate hikes, which have weighed on equity markets globally.

"I don't think he's going to say anything dovish or hawkish - in an attempt to at least have the first appearance to be down the middle or balanced," said Art Hogan, chief market strategist at B. Riley FBR in Boston.

"I surely think the current Fed would let some inflationary pressure run hotter than their target for a period without getting more aggressive."

The Fed said on Friday it expected economic growth to remain steady and saw no serious risks on the horizon that might pause its planned pace of rate hikes.

The U.S. 10-year Treasury yields eased to 2.8587 percent US10YT=RR , slipping from the four-year high it hit last week, while the CBOE Volatility index .VIX , known as Wall Street's fear gauge, was last at 16.12.

At 12:37 p.m. ET, the Dow Jones Industrial Average .DJI was up 274.71 points, or 1.09 percent, at 25,584.7 and the S&P 500 .SPX was up 19.41 points, or 0.71 percent, at 2,766.71.

The Nasdaq Composite .IXIC was up 51.29 points, or 0.7 percent, at 7,388.68.

Technology stocks .SPLRCT , which led the S&P 500 sectors on Monday, have been the top gainers so far this year, with an 8.6 percent rise.

QualcommQCOM.O was up 3.4 percent after the chipmaker urged BroadcomAVGO.O to enter into price negotiations for the first time on Broadcom's$117 billion offer for the company. urn:newsml:reuters.com:*:nL4N1QG40N

General ElectricGE.N dipped 1.73 percent and was the most traded stock across all U.S. exchanges after the company nominated three new candidates to its board. urn:newsml:reuters.com:*:nL4N1QG44J

Berkshire HathawayBRKa.N gained 3.22 percent after Warren Buffett said his conglomerate, which is sitting on $116 billion of cash, is "more inclined" to repurchase stock than pay dividends as a means to use excess cash. urn:newsml:reuters.com:*:nL2N1QG0CU

Advancing issues outnumbered decliners on the NYSE by 1,793 to 1,032. On the Nasdaq, 1,745 issues rose and 1,088 fell.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva) ((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6749 6328; Reuters Messaging: sruthi.shankar.reuters.com@reuters.net))

Keywords: USA STOCKS/

Referenced Symbols:AVGO,

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