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* Investors starting to price in Biden victory - strategists
* Xilinx surges on report of buyout offer by AMD
* Gilead rises on positive data from final remdesivir study
* Futures up: Dow 0.43%, S&P 0.49%, Nasdaq 0.51%
Oct 9 (Reuters) - Wall Street's main indexes were set to rise on Friday, setting up the S&P 500 and the Dow for their second straight weekly gain on hopes of more fiscal aid and growing expectations of a Democratic victory in next month's presidential election.
After stalling talks on a comprehensive aid package earlier this week, U.S. President Donald Trump on Thursday called for a "skinny" relief bill that would include elements such as direct payments and a bailout to the struggling airline sector.
Shares of JetBlue Airways Corp, Delta Air Lines Inc , American Airlines Group Inc and United Airlines Holdings Inc edged higher in premarket trading.
"The market is continuing to rise on hopes of some sort of a conclusion (on stimulus), not only to the airlines, but to the rest of the country," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
At 8:46 a.m. ET, Dow e-minis were up 121 points, or 0.43%, S&P 500 e-minis were up 16.75 points, or 0.49%, and Nasdaq 100 e-minis were up 59 points, or 0.51%.
Recent trading on Wall Street has been dictated by negotiations in Washington on more fiscal aid, with stocks falling sharply on Tuesday after Trump broke off talks with Democrats.
The three main stock indexes have since recovered, with investors beginning to digest the possibility of Biden winning the Nov. 3 election after a fractious debate last month led to a jump in his lead over Trump in several national polls.
"Some of the market sectors that would be thought of as performing better under a Biden administration have started pricing in a higher probability of a Biden victory," said Dan Eye, head of asset allocation and equity at Fort Pitt Capital Group in Harrisburg, Pennsylvania.
Gains of about 10% have put the S&P small-cap and mid-cap indexes on course for their best two-week run since June, outperforming a 4.5% increase in the benchmark S&P 500 over the same period.
In company news, Xilinx Inc surged 17.4% after a report said Advanced Micro Devices Inc was in talks to buy the chipmaker in a deal that could be valued at more than $30 billion. Shares of AMD fell 2.6%.
General Electric Co jumped 6.0% as a report said Goldman Sachs reinstated coverage on the U.S. industrial conglomerate with a "buy" rating, saying the company will emerge stronger from the COVID-19 pandemic.
Gilead Sciences Inc rose 2.2% after final data from the drugmaker's antiviral drug remdesivir showed the treatment cut COVID-19 recovery time by five days.
Attention from next week will also be on Corporate America's third-quarter earnings season, kicked off by JPMorgan Chase & Co , Citigroup Inc and drugmaker Johnson and Johnson .
Analysts expect earnings at S&P 500 firms to have dropped about 21% in the quarter, according to IBES data from Refinitiv. (Reporting by Devik Jain and Sagarika Jaisinghani in Bengaluru; Editing by Maju Samuel)
