September 19, 2019 / 5:29 PM / 24 days ago

US STOCKS-Microsoft, health shares boost Wall St; S&P 500 eyes record high

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* Microsoft gains on $40 bln share buyback plan

* Healthcare stocks among top boosts to S&P 500

* U.S.-China low-level trade talks resume on Thursday

* Indexes up: Dow 0.20%, S&P 0.28%, Nasdaq 0.31% (Updates to midday)

By Ambar Warrick and Medha Singh

Sept 19 (Reuters) - Gains in Microsoft and healthcare shares boosted Wall Street’s main indexes on Thursday, a day after the Federal Reserve cut interest rates as expected and left the door open for further monetary easing.

Shares of the software giant rose 1.5% and drove the broader technology sector up 0.37% after the company unveiled a $40 billion stock buyback plan.

The S&P 500 was about 12 points shy of its record high of 3,027.98, as markets also turned optimistic on talks between U.S. and Chinese deputy trade negotiators aimed at laying the groundwork for high-level negotiations in early October.

A recent easing in trade tensions has helped the three main indexes recover all their losses from August.

On Wednesday, the Fed announced a quarter percentage point cut in interest rates for the second time this year and said future reductions would be “largely data-dependent”.

Traders see a nearly 50% chance for another 25 basis point rate cut in October, according to CME Group’s FedWatch tool.

“The market just continues to believe the Fed is going to be accommodative,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.

The Fed injected another $75 billion into the U.S. banking system on Wednesday, restoring a measure of order after the central bank’s benchmark interest rate rose above its targeted range for the first time since the financial crisis.

The healthcare index, the worst performing S&P sector this year, gained about 0.77% as U.S. House Speaker Nancy Pelosi released a proposal on drug pricing policy.

The plan is a “big negative” for drugmakers and the stock reaction has already been priced in to some degree, said Thomas Martin, senior portfolio manager at GlobAlt Investments.

At 12:59 a.m. ET, the Dow Jones Industrial Average was up 55.42 points, or 0.20%, at 27,202.50 and the S&P 500 was up 8.49 points, or 0.28%, at 3,015.22. The Nasdaq Composite was up 25.24 points, or 0.31%, at 8,202.63.

Shares of retailer Target Corp rose nearly 1% after it announced a $5 billion share buyback plan.

Advancing issues outnumbered decliners by a 2.29-to-1 ratio on the NYSE and a 1.76-to-1 ratio on the Nasdaq.

The S&P index recorded 22 new 52-week highs and one new low, while the Nasdaq recorded 59 new highs and 28 new lows. (Reporting by Ambar Warrick and Medha Singh in Bengaluru; Editing by Anil D’Silva)

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