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Adobe tumbles after forecasting Q4 earnings below

estimates

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Boeing ( BA ) falls as workers go on strke

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Russell 2000 small cap index outperforms, up 2.2%

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Indexes up: Dow 0.82%, S&P 500 0.60%, Nasdaq 0.68%

(Updated prices at 2:20 p.m ET/ 1820 GMT)

By Sinéad Carew and Shashwat Chauhan

Sept 13 (Reuters) - Wall Street's main indexes rose on

Friday as investors reevaluated the possibility of a bigger

interest rate cut by the Federal Reserve next week, with

interest rate sensitive small cap stocks outperforming.

Traders' bets on a 50-basis point rate cut jumped to 47%

from 28% on Thursday, CME's FedWatch Tool showed, after former

New York Fed President Bill Dudley said late Thursday there was

a strong case for a 50-bps interest rate cut.

Media reports had said early Thursday the size of the

cut was "a close call."

"There's just rumblings that have started to bubble up again

that the discussion in the Fed is leaving 50 basis points on the

table," Jim Baird, chief investment officer with Plante Moran

Financial Advisors, Southfield, Michigan.

Prior to this, bets on the Fed sticking to a smaller

25-bps cut firmed on Thursday following news of slightly higher

producer prices following August consumer prices data.

While the renewed hopes for a bigger cut were boosting

large cap indexes on Friday they were most evident in the

Russell 2000 small cap index, which was up 2.2%. Smaller

companies are more sensitive to interest rate changes as they

depend more on borrowed money and floating rate loans.

Baird argued that trading on Friday appeared to show

investor optimism that a 50 basis point cut would not indicate a

coming recession.

"If investors were looking at this and saying they have

to move quicker because they're behind the curve you wouldn't

see risk assets like small caps rally," said Baird. "You're

seeing some of the riskier areas of the equity market advance

pretty strongly today."

As of 02:20 p.m. ET, the Dow Jones Industrial Average

rose 335.25 points, or 0.82%, to 41,432.02, the S&P 500

gained 33.65 points, or 0.60%, at 5,629.41 and the Nasdaq

Composite climbed 118.78 points, or 0.68%, to 17,688.45.

All 11 S&P 500 sectors rose, led by a 1.3% rise in materials

stocks that tracked an increase in the prices of

precious metals.

A survey showed U.S. consumer sentiment improved in

September as inflation subsided, though Americans remained

cautious ahead of the November presidential election.

All three major U.S. benchmark indexes were trading near

two-week highs, on track to log solid weekly gains.

Photoshop maker Adobe, down almost 9%, was the S&P

500's biggest percentage decliner after forecasting

fourth-quarter earnings below estimates.

Boeing ( BA ) shares fell 3% after its U.S. West Coast

factory workers walked off the job early on Friday as they

overwhelmingly rejected a contract deal.

Chinese e-commerce firm PDD Holdings ( PDD ) lost 3% after

the Biden administration said it was moving to curb low-value

shipments entering the U.S. duty-free under the $800 "de

minimis" threshold.

Uber ( UBER ) gained 5.8% after the ride-hailing platform

said it would bring autonomous ride hailing to Austin, Texas,

and Atlanta in partnership with Alphabet's Waymo.

Advancing issues outnumbered decliners by a 5.52-to-1 ratio

on the NYSE where there were 580 new highs and 25 new lows.

On the Nasdaq, 3,166 stocks rose and 1,022 fell as

advancing issues outnumbered decliners by a 3.1-to-1 ratio. The

S&P 500 posted 58 new 52-week highs and one new low while the

Nasdaq Composite recorded 106 new highs and 47 new lows.