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S&P 500, Dow hit record highs
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BofA expects Fed to go for 75-bp cut in Q4
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US big banks rise after Fed's rate cut
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S&P 500 +1.87%, Nasdaq +2.70%, Dow +1.42%
(Updated at 3:13 p.m. ET/1913 GM)
By Noel Randewich and Purvi Agarwal
Sept 19 (Reuters) - The S&P 500 surged to intra-day
record highs on Thursday, the day after the Federal Reserve cut
interest rates by 50 basis points and indicated more rate cuts
were on the horizon.
Heavyweight stocks that have enjoyed much of this year's
stock market rally made fresh gains, with Tesla surging
7%, Apple ( AAPL ) rallying nearly 4% and Meta Platforms ( META )
climbing over 4%.
AI powerhouse Nvidia ( NVDA ) rose 4.8%, helping lift the
PHLX semiconductor index almost 5%.
Better-than-expected jobless claims data further stoked
global risk appetite.
On Wednesday, the Federal Reserve announced the rate cut
at the high end of expectations, and said it had greater
confidence inflation was under control. Fed Chair Jerome Powell
said the U.S. economy remained strong and the central bank would
decide on the appropriate pace of future rate cuts.
"The Fed has sanctioned a pretty strong economic picture
here, and so we're just seeing the money flow back into some of
the sectors that have perhaps underperformed so far this
quarter," said James Ragan, Director of Wealth Management
Research at D.A. Davidson.
The small-cap Russell 2000 index rose 2.4% as lower
interest rates boosted prospects of reduced operating costs and
greater profits.
The S&P 500 was last up 1.87% at 5,723.44 points. The Nasdaq
gained 2.70% to 18,048.05 points, while the Dow Jones Industrial
Average was up 1.42% at 42,090.90 points.
Of the 11 S&P 500 sector indexes, eight rose, led by
information technology, up 3.32%, followed by a 2.12%
gain in communication services.
BofA Global Research said it now expects a total of 75 basis
points in rate cuts by the end of this year, steeper than its
previous forecast of 50 bps.
Evercore ISI data going back to 1970 showed the S&P 500 has
posted an average 14% gain in the six months following the first
reduction of a rate-cutting cycle.
September has generally been a disappointing month for U.S.
equities with the S&P 500 notching an average loss of 1.2% since
1928.
The S&P 500 banks index rose 2.6%, with gains in
Citigroup ( C/PN ) and Bank of America ( BAC ) after they lowered
their respective prime rates.
Fertility benefits management firm Progyny ( PGNY ) plunged
33% after a significant client notified the company it had
elected to exercise a 90-day option to terminate its services
agreement.
Advancing issues outnumbered falling ones within the S&P 500
by a 2.8-to-one ratio.
Across the U.S. stock market, advancing stocks
outnumbered falling ones by a 3.9-to-one ratio.