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* Fed expected to raise rates, signal fewer hikes ahead
* FedEx drops after slashing 2019 forecast, weighs on UPS
* Micron falls on tepid forecast
* Indexes up: Dow 0.61 pct, S&P 0.74 pct, Nasdaq 0.99 pct (Updates prices to open)
By Amy Caren Daniel
Dec 19 (Reuters) - U.S. stocks climbed on Wednesday, boosted by technology stocks, and financials also gained ahead of a highly awaited Federal Reserve announcement where investors will watch for signals of fewer rate hikes, which could spark a year-end rally.
The Fed is expected to raise rates for the fourth time this year when its two-day policy meeting ends at 2 p.m. ET, but the focus will be on whether it will still hint at three increases next year as it did in September.
Fed funds futures are pricing in only one more rate rise next year. The latest Reuters poll showed economists expect two rate hikes, with the probability of a U.S. recession in the next two years jumping to 40 percent.
The S&P financial sector — the worst performing S&P sector this month — rose 0.71 percent, with rate-sensitive banks gaining 0.74 percent.
“The Fed announcement is going to be a major catalyst. I expect trading to be quiet heading into the announcement,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
“We’re due for a pick up in markets. If you get the Fed out of the way, at least in the near term, you don’t have any major hurdles for markets.”
A rough couple of months have pushed all three major indexes more than 10 percent below recent highs, into what is known as correction territory, and that has sparked calls, including from President Donald Trump, for the Fed to hold fire.
At 9:59 a.m. EDT the Dow Jones Industrial Average was up 144.52 points, or 0.61 percent, at 23,820.16, the S&P 500 was up 18.76 points, or 0.74 percent, at 2,564.92 and the Nasdaq Composite was up 67.26 points, or 0.99 percent, at 6,851.17.
Only the defensive utilities and the consumer staples sectors, were trading in the red.
FedEx Corp, seen as a bellwether for the global economy, fell 9.9 percent after slashing its 2019 forecast due to an economic slowdown. Rival United Parcel Service Inc fell 2 percent.
Micron Technology Inc fell 3 percent after giving a tepid forecast that exacerbated fears that the chip boom was fizzling out.
General Electric Co gained 5.5 percent after Bloomberg reported that the company has moved ahead with the planned IPO of its healthcare unit.
Advancing issues outnumbered decliners for a 2.27-to-1 ratio on the NYSE and a 2.37-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 23 new lows, while the Nasdaq recorded three new highs and 171 new lows. (Reporting by Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta)