* Biotechs lead S&P above 2,000 for first time
* Hope for ECB stimulus action lifts financials
* Data on service sector, housing market below forecasts
* Indexes up: Dow 0.6 pct, S&P 0.5 pct, Nasdaq 0.6 pct (Updates to market open, with S&P 500 topping 2000)
By Ryan Vlastelica
NEW YORK, Aug 25 (Reuters) - The S&P 500 stock index rose to an intraday record on Monday, topping 2,000 for the first time in a broad rally led by financial and biotechnology stocks.
Major indexes opened higher, with the benchmark index hitting a record early in the session, though it didn't cross the 2,000 milestone until shortly after 10 a.m. (1400 GMT) Equities were boosted by corporate merger activity and growing hopes for more monetary stimulus in European markets.
Biotechs rallied after Roche Holding AG agreed to buy InterMune Inc for $8.3 billion in cash, the latest vote of confidence in a sector that many, including Federal Reserve Chair Janet Yellen, are worried is overvalued.
InterMune jumped 36 percent to $73.00, with the Nasdaq Biotech index up 2.4 percent. Gilead Sciences and Regeneron Pharmaceuticals were the S&P 500's top two biggest percentage gainers, both up about 2.5 percent.
Biotech stocks have been a primary leader of recent gains, and many analysts had expected the group to drive the S&P over 2,000.
"The trend continues to be positive and it's like fighting a tsunami, it keeps going and going and going and it won't stop," said Adam Hewison, president and chief executive at INO.com in Annapolis, Maryland.
The level has more psychological than fundamental significance, and it comes amid a variety of cautious signals for the economy, including tepid U.S. growth, waning stimulus from the Federal Reserve and simmering conflict between Ukraine and Russia. In the latest economic data, reads on both the U.S. services sector and the housing market came in below forecasts.
"All the world events are negative; people are just shrugging them off," said Hewison. "I think we're going to continue seeing gains."
The Dow Jones industrial average rose 93.37 points or 0.55 percent, to 17,094.59, the S&P 500 gained 10.6 points or 0.53 percent, to 1,999 and the Nasdaq Composite added 27.09 points or 0.6 percent, to 4,565.64.
Early gains tracked European equities, where an index of major shares rose 0.9 percent after European Central Bank President Mario Draghi said Friday the ECB was prepared to respond with available tools if inflation dropped further. Investors took this to mean the ECB could start an asset purchase program or adopt other stimulus measures in the coming months, which could boost assets like stocks.
Financials were a primary beneficiary of these expectations. Morgan Stanley, which has heavy exposure to Europe, rose 2.5 percent to $34.29. Goldman Sachs Group Inc, a Dow component, was up almost 2 percent at $178.90.
U.S. stocks have been strong of late. Major indexes closed a third week of gains Friday, with the Dow and S&P enjoying their best weeks since April.
Burger King is in talks to acquire Canadian coffee and doughnut chain Tim Hortons Inc in a deal that would be structured as a so-called tax inversion transaction to move Burger King's domicile to Canada, which has lower overall corporate taxes. Shares of Burger King jumped 15 percent to $31.18 while U.S. shares of Tim Hortons advanced 19.5 percent to $75.07. (Editing by Bernadette Baum and James Dalgleish)