US STOCKS-Fed rate-cut hints power S&P 500 to all-time high

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* Stocks pare gains on Trump's Iran comment
* Financials fall; Energy up most among S&P sectors
* Carnival Corp slides on 2019 profit warning
* Indexes up: Dow 0.45%, S&P 0.44%, Nasdaq 0.36%

(Updates to early afternoon)
By Shreyashi Sanyal
June 20 (Reuters) - A rally on Wall Street lost strength on
Thursday after the S&P 500 index touched a record high, powered
by the Federal Reserve's signals that it could cut interest
rates as early as July to combat growing risks to global and
domestic growth.
The U.S. central bank left rates unchanged at the end of its
two-day June policy meeting on Wednesday, but pledged to "act as
appropriate" to sustain economic health. Wall Street's main indexes have gained in recent weeks on
expectations of a rate cut and hopes of a revival of trade talks
between the United States and China at the Group of 20 meeting
next week in Japan.
The benchmark S&P 500 index .SPX , which has risen about 7%
so far in June, hit an intraday record high of 2,956.20 on
Thursday.
"It was always going to be difficult for the Fed to live up
to high market expectations. While the bar was set high,
policymakers appear to have cleared it with ease while also
leaving themselves with plenty of outs," said Craig Erlam,
senior market analyst at OANDA in London.
"It's clear that the G20 meeting next week will either give
them (the Fed) that out or make the decision to cut quite
straightforward."
A more-than-expected dovish Fed led to U.S. treasury bond
yields tumbling, with the benchmark 10-year yields US10YT=RR
dropping below 2% for the first time in more than 2-1/2 years.
US/
Financial stocks .SPSY dropped 0.34%, while the energy
index .SPNY jumped 2.01%, the most among the 11 major S&P
sectors, as oil prices surged over 5% on renewed tensions in the
Middle East after Iran shot down a U.S. military drone. O/R
Stocks pared some gains after President Donald Trump's
comment "You'll find out" when asked how the United States will
respond to Iran. At 12:56 p.m. ET, the Dow Jones Industrial Average .DJI
was up 120.53 points, or 0.45%, at 26,624.53 and the S&P 500 was
up 12.90 points, or 0.44%, at 2,939.36.
The Nasdaq Composite .IXIC was up 28.58 points, or 0.36%,
at 8,015.91.
The technology sector .SPLRCT rose 0.89%, boosting the S&P
500 by the most, with Oracle Corp ORCL.N leading the charge.
Oracle's shares jumped 7.37% after the business software
maker forecast current-quarter profit above estimates.
Cruise operator Carnival Corp CCL.N slid 9.41%, the most
among S&P companies, after cutting its profit forecast for the
year on the Trump administration's sudden ban on cruises to Cuba
and weakening demand in Europe over political uncertainty.
Rivals Royal Caribbean Cruises Ltd RCL.N and Norwegian
Cruise Line Holdings Ltd NCLH.N dropped more than 3% each.
Buoying sentiment was data which showed the number of
Americans filing applications for unemployment benefits fell
more than expected last week, pointing to underlying labor
market strength despite a sharp slowdown in job growth in May.
Advancing issues outnumbered decliners by a 2.49-to-1 ratio
on the NYSE and by a 1.31-to-1 ratio on the Nasdaq.
The S&P index recorded 95 new 52-week highs and three new
lows, while the Nasdaq recorded 118 new highs and 35 new lows.