Aug 10 (Reuters) - The blue-chip Dow and the benchmark S&P 500 hit record highs on Tuesday, lifted by a rally in economy-linked value stocksafter the Senate passed a much-anticipated bipartisan $1 trillion infrastructure package. A top priority for President Joe Biden, the bill could provide the nation"s biggest investment in decades in roads, bridges, airports and waterways. Senators also began voting on a follow-up $3.5 trillion spending package that Democrats plan to pass without Republican votes. read more "It"s a huge investment and a huge victory for the Biden administration but it"s not the end of the story and the bill now faces a difficult path as it negotiates its way through the House," said Danni Hewson, financial analyst at AJ Bell. Nine of the 11 major S&P sectors rose. Energy (.SPNY), financials (.SPSY), industrials (.SPLRCI) and materials (.SPLRCM), which stand to benefit the most from a economic recovery, were the top gainers, while technology <.SPLRCT> shares underperformed. "It"s a headline-driven market that"s very finicky. This infrastructure bill is affecting the markets directly and you are seeing money fly into the commodities trade and coming out of tech," said Dennis Dick, a trader at Bright Trading LLC. "This market is in rotation station and August is typically a quieter period. There"s less traders out there, and that can make us prone to sudden little jerks in the market." With new coronavirus cases rising steadily in the United States, progress on the infrastructure package is expected to help gauge fiscal support for the next leg of a recovery in the world"s largest economy. The rapid spread of the Delta variant has pushed cases and hospitalizations to a six-month high, with COVID-19 cases averaging 100,000 for three days in a row - up 35% over the past week. read more Investor focus is also on inflation numbers due later this week for hints about the path of the Federal Reserve"s policy, after two Fed officials said on Monday inflation was already at a level that could satisfy one leg of a key test for the beginning of rate hikes. read more At 12:28 p.m. ET, the Dow Jones Industrial Average (.DJI) was up 137.15 points, or 0.39%, at 35,239.00. The S&P 500 (.SPX) was up 9.70 points, or 0.22%, at 4,442.05 after turning negative briefly earlier in the session and the Nasdaq Composite (.IXIC) was down 35.45 points, or 0.24%, at 14,824.73 weighed down by declines in Apple Inc (AAPL.O), Amazon.com (AMZN.O), and Microsoft Corp (MSFT.O). AMC Entertainment (AMC.N)rose 1.4% after beating second-quarter revenue estimates as moviegoers returned to its theaters after a year of closures and restrictions. read more Kansas City Southern (KSU.N) gained 7.2% after Canadian Pacific Railway Ltd (CP.TO) raised its offer for the U.S. railroad operator by about $2 billion to $27.29 billion. read more Advancing issues outnumbered decliners by a 1.28-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.15-to-1 ratio on the Nasdaq. The S&P index recorded 49 new 52-week highs and two new lows, while the Nasdaq recorded 66 new highs and 78 new lows.