* Intel boosts buyback program, focus on tech large caps
* Materials shares rise alongside metals prices
* J.C. Penney up as activist investor to join board
* Dow up 0.74 pct, S&P up 0.52 pct, Nasdaq up 0.95 pct (Updates to midday)
By Rodrigo Campos
NEW YORK, Jan 24 (Reuters) - U.S. stocks rose on Monday, lifted by natural resource shares on bets on global growth and a share-buyback plan by Intel that added to the allure of the large-cap technology sector.
Intel Corp raised its dividend by 15 percent and authorized another $10 billion for stock repurchases, a sign larger technology companies with slower growth may be looking for ways to reward investors.
Intel added 1.6 percent to $21.15, and International Business Machines, which rose 2.1 percent to $158.70, hit a fresh lifetime high and led gains on the Dow industrials.
"The Intel news is part of what's helping some of the big technology stocks do well today," said Howard Ward, portfolio manager of the GAMCO Growth Fund in Rye, New York.
He said investors may be looking at other companies that have used buybacks to compensate investors. "Part of the IBM (growth) story is excess cash flow being used to buy back stock."
The Dow Jones industrial average gained 88.06 points, or 0.74 percent, to 11,959.90. The Standard & Poor's 500 rose 6.71 points, or 0.52 percent, to 1,290.06. The Nasdaq Composite added 25.61 points, or 0.95 percent, to 2,715.15.
The S&P materials sector advanced 1.4 percent. Copper prices rose as concerns about a decrease in Chinese demand were replaced by worries over supply constraints..
"It's very difficult to ignore the positive implications for earnings in material stocks when the global economy is gaining traction," Ward said.
The chief executive of Alcoa Inc said he sees continued demand for aluminum in 2011, and the Dow component's shares gained 4.3 percent to $16.48.
Further boosting the technology sector, Nvidia Corp jumped 11.9 percent to $24.86 after Barron's said the chipmaker's stock could nearly double in price this year..
Paper and packaging stocks rallied a day after Rock Tenn Co said it would buy Smurfit-Stone Container Corp for $3.5 billion.
Rock-Tenn jumped 4 percent to $59.46 and Smurfit-Stone soared 27.2 percent to $35. International Paper gained 3.7 percent to $28.93 after hitting its highest since September 2008 at $29.64.
J.C. Penney Co Inc shares jumped 7.1 percent to $32.50 on news activist investor William Ackman will join the department store operator's board next month, heading off a potential fight over the direction of its turnaround.. (Reporting by Rodrigo Campos; Editing by Kenneth Barry)