(For a live blog on the U.S. stock market, click or type LIVE/ in a news window)
* Fed holds rates steady, signals potential cuts this year
* Adobe buoys S&P 500 after strong quarterly results
* Dow up 0.30%, S&P 500 up 0.39%, Nasdaq up 0.42% (Updates with late session trade, adds investor comment)
By Noel Randewich
June 19 (Reuters) - Wall Street rose on Wednesday after the Federal Reserve signaled potential cuts later this year, reassuring investors worried that the U.S.-China trade war could stall economic growth.
Saying it “will act as appropriate to sustain” economic expansion, the central bank signaled rate cuts of as much as half a percentage point over the remainder of 2019.
In its statement following a two-day policy meeting, the Fed held rates steady, as expected, but dropped a previous promise to be “patient” in adjusting rates.
“We think the Fed delivered. It did no harm. It walked right up to a cut without doing it today. It’ll likely be coming in July absent some big trade news or other news,” said John Augustine, chief investment officer at Huntington Bank in Columbus, Ohio.
Buoyed by growing confidence the Fed will cut rates, and by hopes of an end to the U.S.-China trade war, U.S. stocks have climbed in recent weeks. The S&P 500 has gained about 6% in June and is less than 1% away from its record high close set in April.
“At the end of the day what they (the Fed) want to do is give a nod to the market. Expectations had gotten so dovish that they need to give a nod to that, but at the same time not make any commitment and be forced to cut rates later on if conditions perhaps changed,” said Kristina Hooper, Chief Global Market Strategist at Invesco in New York.
The financial sector rose 0.1%, with bank stocks dipping 0.3%. Lower interest rates tend to hurt banks’ profits.
At 3:26 p.m. ET the Dow Jones Industrial Average was up 0.30% at 26,546.11 points, while the S&P 500 was up 0.39% at 2,929.25.
The Nasdaq Composite rose 0.42% to 7,987.37.
Contributing more than any other stock to advances on the Nasdaq and S&P 500, Adobe Inc surged 5.2% after the Photoshop software provider beat analysts’ estimates for quarterly profit and revenue.
Weighing most on the Nasdaq was Facebook, down 1.8%, as its ambitious plan to launch a digital currency faced a backlash from regulators and politicians in the United States and abroad.
The healthcare sector rose 1.0%, helped by gains in UnitedHealth Group Inc, Pfizer Inc and Allergan Plc.
Allergan jumped 5.3% after the drugmaker said its constipation drug, jointly developed with Ironwood Pharmaceuticals Inc, improved symptoms in patients suffering from irritable bowel syndrome with constipation.
Advancing issues outnumbered declining ones on the NYSE by a 1.73-to-1 ratio; on Nasdaq, a 1.40-to-1 ratio favored advancers.
The S&P 500 posted 40 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 55 new highs and 57 new lows. (Reporting by Noel Randewich; Additional reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru Editing by Lisa Shumaker, Sonya Hepinstall and Chizu Nomiyama)