S&P 500 hits record high with Fed policy decision imminent
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Microsoft gains after new share buyback plan, dividend hike
Intel jumps following collaboration with Amazon's AWS
Retail sales unexpectedly rise 0.10% in August
Indexes up: Dow 0.37%, S&P 500 0.40%, Nasdaq 0.66%
Updated at 11:35 a.m. ET/1535 GMT
By Johann M Cherian and Purvi Agarwal
Sept 17 (Reuters) -Wall Street's main stock indexes rose on Tuesday, with the S&P 500 hitting an intraday record high ahead ofa crucial Federal Reserve interest-rate decision, after fresh economic data allayed worries of a sharp slowdown in the U.S. economy.
The benchmark index touched 5,670.81 earlier in the session, erasing the last of a deep selloff that lasted through late July and early August, sparked by an unexpected spike in unemployment.
The latestreport from the Commerce Department shows that retailsales rose unexpectedly in August, aftera decline in auto dealership receipts was offset by strength in online purchases, suggesting the economy was onsolid footing through mostof the third quarter.
Microsoft MSFT.O gave one of the biggestboosts to the S&P 500,with a 1.0%rise on the day after the AI-frontrunner's board approved a new $60-billion share buyback program and hiked its quarterly dividend by 10%.
Other rate-sensitive growth stocks such as Alphabet GOOGL.O and Tesla TSLA.O added 0.70% and 2.10%, while Nvidia NVDA.O edged up 0.30%, pushing the broader chips index .SOX higher 0.94%.
The blue-chip Dow also tradedat a record high. The Russell 2000 index .RUT tracking small caps - which tend to perform better in a low-interest-rate environment - outperformed with a 1.7% rise.
At 11:35 a.m. ET, the Dow Jones Industrial Average .DJI rose 153.14 points, or 0.37%, to 41,775.22, the S&P 500 .SPX gained 22.75 points, or 0.40%, to 5,655.84 and the Nasdaq Composite .IXIC gained 115.76 points, or 0.66%, to 17,707.88.
Eight of the 11 S&P 500 sectors traded higher, led by a 1.2% rise in Consumer Discretionary .SPLRCD, while healthcare stocks .SPXHC were the biggest losers, with a 0.40% decline.
With Fedofficials scheduled to commence their two-day meeting, traders are betting on a 59% probability theworld's most influential central bank will decide to lower borrowing costs by 50 basis points, according to the CME Group's FedWatch Tool.
Odds favoring a 25-bps reduction stand at 41% from 66% a week earlier, as investors focused on remarks from a former policymaker supporting an outsized move and signs of a cooling labor market, among other indicators.
"The economy is slowing but it's not really in a bad spot. The Fed doesn't cut when things are going well," said Paul Nolte, senior wealth advisor and market strategist for Murphy & Sylvest.
"Investors have already done a pretty good job of bidding up the market. That's where the press conference tomorrow is going to be very important. If they talk about some risks in the market, we could see it sell off."
September has historically been weak for U.S. equities, with the benchmark S&P 500 down about 1.20% for the month, on an average,since 1928. However, factoring in theday's gains, the index is up about 0.14% so far this September.
Among other movers, Intel INTC.O rose 6.20% after signing Amazon.com's AMZN.O cloud services unit as a customer to make custom artificial-intelligence chips. Amazon.com AMZN.O gained 1.70%.
Advancing issues outnumbered decliners by a 2.94-to-1 ratio on the NYSE, and by a 2.48-to-1 ratio on the Nasdaq.
The S&P 500 posted 47 new 52-week highs and no new lows, while the Nasdaq Composite recorded 113 new highs and 47 new lows.
Reporting by Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Pooja Desai
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