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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 jumbo rate cut

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Weekly jobless claims stand at 219,000

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Indexes up: Dow 0.94%, S&P 500 1.29%, Nasdaq 2.15%

(Updated at 09:46 a.m. ET/1346 GMT)

By Johann M Cherian and Purvi Agarwal

Sept 19 (Reuters) -

Wall Street rallied on Thursday with the S&P 500 hitting

another intraday record high after the Federal Reserve kicked

off its easing cycle with half-a-percentage point reduction and

forecast more cuts were on the horizon.

Rate-sensitive growth stocks that have led much of this

year's rally rose. Microsoft ( MSFT ) added 2%, Tesla

gained 4.2% and Apple ( AAPL ) advanced 2.6%.

Semiconductor stocks such as Nvidia ( NVDA ) rose 4.7%,

while Advanced Micro Devices ( AMD ) gained 3.5% and Broadcom ( AVGO )

added 3.8%, sending the Philadelphia SE Semiconductor

Index up 3.6%.

The Russell 2000 index also rose 1.7% with the

broader market, as a lower interest environment could mean lower

operating costs and greater profits for credit-dependent

companies.

At 09:46 a.m., the Dow Jones Industrial Average

rose 391.24 points, or 0.94%, to 41,894.34, the S&P 500

gained 72.37 points, or 1.29%, to 5,690.63 and the Nasdaq

Composite gained 377.68 points, or 2.15%, to 17,955.01.

Nine out of the 11 S&P 500 sectors gained, led by tech

stocks with a 2.8% rise, while utilities

were the biggest laggards.

After delivering its super-sized verdict on Wednesday, the

Fed forecast rates to fall by another 50 bps by year-end and

unveiled macroeconomic projections that analysts say reflect a

goldilocks scenario, where growth is steady and inflation and

unemployment stay low.

Data on the day showed jobless claims for the week ended

Sept. 14 stood at 219,000, lower than economists' estimates of

230,000.

"There's a delayed reaction to the Fed's rate cut ...

the claims came in low, so it's only going to help fuel the idea

that a soft landing is in play," said Ross Mayfield, investment

strategist at Baird.

"The guidance for plenty more cuts by the end of 2025

should open up (rate-sensitive) sectors to reengage and expand."

Traders now see a 63.1% chance that the central bank will

lower interest rates by 25 basis points at its November meeting,

as per the CME Group's FedWatch tool.

BofA Global Research now anticipates a total of 75 bps rate

cuts by the end of this year, compared with 50 bps forecast

earlier.

Market reaction in the aftermath of the decision was muted,

with all the three indexes closing slightly lower in the

previous session.

However, data going back to 1970 from Evercore ISI 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.

Bank of America ( BAC ) and Wells Fargo ( WFC ) advanced

over 1% each after the big banks lowered their respective prime

rates.

Citigroup ( C/PN ) also rose 1.9%, sending the broader banks

index 0.8% higher.

Among individual movers, 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 decliners by a 5.27-to-1

ratio on the NYSE and by a 4.71-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 100 new highs and 24 new

lows.