Oct 23 (Reuters) - Northern Trust ( NTRS ) reported a

42% rise in third-quarter profit on Wednesday, on a higher fee

income from servicing and managing client assets, sending the

asset and wealth manager's shares up 4.4% in trading before the

bell.

Expectations of further rate cuts which began in September,

have bolstered investor sentiment, sparking a market rally, and

boosted the value of assets under management (AUM) and the

corresponding fees earned by asset managers.

The benchmark S&P 500 index rose 5.5% in the three

months ended Sept. 30.

Northern Trust's ( NTRS ) investment and other servicing fees rose

8% to $1.2 billion in the third quarter from a year earlier, and

its assets under custody or administration jumped 23% to $17.42

trillion.

The Chicago, Illinois-based company provides wealth

management, asset management and banking services to

institutions, affluent families and individuals.

Earlier this month, Northern's peers State Street

and Bank of New York Mellon ( BK ) also reported a rise in

profit, boosted by an increase in their fee-based incomes earned

from managing client assets.

Northern Trust's ( NTRS ) net interest income (NII) - the difference

between what it earns on assets and pays out on liabilities -

jumped 21% to $569.4 million in the quarter ended Sept. 30.

Net income came in at $464.9 million, or $2.22 per share, up

from $327.8 million, or $1.49 per share, a year earlier.

The company's foreign exchange trading income rose 4% to

$54.1 million.

Northern Trust's ( NTRS ) shares have gained 13.5% so far this year,

while State Street and BNY have risen 16% and

45.8%, respectively.

(Reporting by Prakhar Srivastava and Pritam Biswas in

Bengaluru; Editing by Shinjini Ganguli)