* Fed reduces asset purchases, upgrades economy assessment
* GDP shows stronger economic growth than expected in Q2
* Twitter shares rally a day after results
* Dow down 0.2 pct, S&P up 0.01 pct, Nasdaq up 0.5 pct (Updates with Whole Foods and Akamai down after the bell)
By Caroline Valetkevitch
NEW YORK, July 30 The S&P 500 and Nasdaq ended higher on Wednesday after the Federal Reserve gave a rosier assessment of the U.S. economy while reaffirming that it is in no hurry to raise interest rates.
The U.S. central bank also, as expected, reduced its monthly asset purchases to $25 billion from $35 billion.
Among the biggest positives were bank shares, with the S&P financial index up 0.4 percent, helping to support the S&P 500. Shares of Wells Fargo gained 1.1 percent to $52.10.
"We got the taper as expected, and the real viewpoint of the committee is they can keep monetary policy accommodative even after we reach our inflation and employment goals," said Art Hogan, chief market strategist at Wunderlich Securities in New York.
Biotechnology stocks boosted the Nasdaq for a second straight day. The Nasdaq biotech index was up 1 percent after Amgen Inc posted better-than-expected earnings and raised its outlook, sending its shares up 5.4 percent to $130.01.
The Dow Jones industrial average fell 31.75 points, or 0.19 percent, to 16,880.36, the S&P 500 gained 0.12 points, or 0.01 percent, to 1,970.07, and the Nasdaq Composite added 20.20 points, or 0.45 percent, to 4,462.90.
The S&P 500 had traded lower ahead of the Fed announcement.
Earlier Wednesday, government data showed gross domestic product grew at a 4 percent annualized rate in the second quarter, above the 3 percent rate that had been expected and a sharp reversal from the weather-impacted first quarter, when the economy contracted a revised 2.1 percent.
Separately, the ADP National Employment Report showed companies hired 218,000 workers in July, below analysts' projections of 230,000 and less than June's total.
Among other big gainers, Twitter Inc surged 20 percent to $46.30, its biggest ever one-day advance, after reporting that monthly active users rose a better-than-expected 24 percent in the second quarter.
Insurance stocks fell after Humana Inc, WellPoint Inc and Aflac Inc all reported lower earnings, though WellPoint's profit was above expectations.
Humana fell 5.6 percent to $120.34, WellPoint lost 0.1 percent to $112.47, and Aflac slid 2.8 percent to $61.38. UnitedHealth lost 1.6 percent to $82.95 and was the biggest drag on the Dow.
After the bell, shares of Whole Foods Markets Inc fell 5.4 percent to $36.99 after the company cut its 2014 forecasts for a fourth time. Akamai Technologies declined 5.9 percent to $57.17 following its results.
About 6.2 billion shares changed hands on U.S. exchanges, above the 5.6 billion average for the month to date, according to data from BATS Global Markets.
(Editing by Leslie Adler)