(For a Reuters live blog on U.S., UK and European stock

markets, click or type LIVE/ in a news window.)

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Weekly jobless claims at 223,000

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Accenture ( ACN ) falls after flagging federal contract

cancellations

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Darden Restaurants ( DRI ) narrows annual profit forecast

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Indexes up: Dow 0.42%, S&P 500 0.34%, Nasdaq 0.50%

(Updates with mid-session trading)

By Pranav Kashyap and Johann M Cherian

March 20 (Reuters) - U.S. stock indexes recouped some of

the early losses on Thursday, as investors digested the Federal

Reserve outlook on interest rates amid persistent tariff

worries.

Traders looked to build on the previous session's gains

after a massive sell-off in recent weeks due to the uncertainty

tied to President Donald Trump's trade policies.

The Fed maintained current interest rates on Wednesday as

expected and reaffirmed its forecast for two 25 basis point

reductions by the end of year.

The central bank also projected slightly reduced growth and

increased inflation for the year, alongside a modest uptick in

the unemployment rate by 2025.

All the three major stock indexes closed higher by more than

1% each in the previous session. The CBOE volatility index

, also known as Wall Street's fear gauge, fell 0.3 points

and was last at 19.6 - at a nearly one-month low.

Market participants are factoring in 63 basis point cut this

year, placing odds of 25 bps rate cut in June at 60%, according

to CME Group's Fedwatch tool.

"The fears have been abated partially by some of Powell's

comments yesterday and in addition, investors are taking a step

back after the initial fears and are rethinking that the tariffs

are a flexible model and could be removed at any time," said

Andre Bakhos, managing member at Ingenium Analytics.

Analysts said recent economic data that indicated a cooling

economy also led to the Fed's dovish stance.

Despite short-term gains, the S&P 500 along with the Nasdaq

have confirmed a 10% drop from their respective record highs -

also known as a technical correction.

Global markets have seen significant volatility in recent

weeks, as investors worry that Trump's aggressive trade policies

could spur inflation, potentially leading to a recession and

disrupting the Fed's monetary easing cycle.

At 11:20 a.m. ET the Dow Jones Industrial Average

rose 179.29 points, or 0.42%, to 42,142.92, the S&P 500

gained 19.70 points, or 0.34%, to 5,694.99 and the Nasdaq

Composite gained 86.54 points, or 0.50%, to 17,839.47.

Eight of the 11 S&P 500 sectors advanced with communication

services leading with a 1.2% rise.

Growth stocks, which bore the brunt of the recent market

rout, gained. Meta gained 4%, Nvidia ( NVDA ) rose 1.9%

and Amazon.com ( AMZN ) climbed 1.2%.

On the data front, initial jobless claims were largely in

line with estimates in the week prior.

A gauge of manufacturing activity in the U.S. mid-Atlantic

region rose more than expected in March. The data also suggested

increasing price pressures.

Darden Restaurants ( DRI ) was the latest U.S. company to

issue cautious forecasts as a fallout of tariff uncertainty. Its

shares rose 6% after the Olive Garden ( DRI ) owner forecast quarterly

sales above estimates.

Accenture ( ACN ) fell 6.2% after the consultancy firm said

the Trump administration's efforts to reduce federal spending

have led to delays and cancellations of new contracts.

Advancing issues outnumbered decliners by a 1.46-to-1 ratio

on the NYSE. and by a 1.29-to-1 ratio on the Nasdaq.

The S&P 500 posted nine new 52-week highs and no new lows

while the Nasdaq Composite recorded 20 new highs and 55 new lows