US STOCKS-Fed's inflation push lifts S&P 500, Nasdaq to new highs

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* Coty drops after bigger-than-expected quarterly loss
* Abbott jumps after U.S. marketing nod for $5 COVID-19 test
* Dow on course to turn positive on the year
* Indexes: Dow 0.90%, S&P 0.43%, Nasdaq 0.09%

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By Medha Singh and Devik Jain
Aug 27 (Reuters) - The S&P 500 and the Nasdaq rose to record
highs on Thursday as the Federal Reserve sought to achieve
inflation averaging 2% over time in an attempt to lift the U.S.
economy out of a deep pandemic-driven recession.
Setting out the central bank's aggressive new strategy at a
virtual Jackson Hole symposium, Fed chief Jerome Powell said it
would offset below-2% periods with higher inflation "for some
time," and ensure employment doesn't fall short of its maximum
level. Eight of the 11 major S&P sectors were trading higher, with
economically-sensitive financials .SPSY leading gains. The
communication services index .SPLRCL , which houses
Google-parent Alphabet Inc GOOGL.O and Facebook Inc FB.O ,
fell for the first time in four days.
"The strategy should be positive in the short term as it
could reduce the potential for interest rate hikes," said Nancy
Davis, chief investment officer at Quadratic Capital Management
LLC in Greenwich, Connecticut.
"At the same time, the statement acknowledges that Fed 'has
less scope to support the economy during a downturn by simply
cutting the federal funds rate'."
The S&P 500 and the Nasdaq have recovered their
coronavirus-driven losses, largely driven by a tech-related
rally at a time when the U.S. economy is struggling with its
worst downturn since the Great Depression.
Data on Thursday showed weekly jobless claims hovered around
1 million last week, suggesting the labor market recovery was
stalling. At 10:52 a.m. ET, the Dow Jones Industrial Average .DJI
was up 255.59 points, or 0.90%, at 28,587.51, on course to turn
positive on the year for the first time since the
coronavirus-driven crash in March.
The S&P 500 .SPX was up 15.09 points, or 0.43%, at
3,493.82, and the Nasdaq Composite .IXIC was up 10.94 points,
or 0.09%, at 11,676.00.
Boeing Co BA.N rose 3.1% after the European Union Aviation
Safety Agency announced plans to begin flight tests of its 737
MAX plane, a move viewed as a key milestone toward its return to
service. Abbott Laboratories ABT.N surged 6.6% after the medical
device maker won U.S. marketing authorization for a $5 rapid
COVID-19 portable antigen test. Cosmetics maker Coty Inc COTY.N shed 5.5% after posting a
bigger-than-expected quarterly loss as demand for its beauty
products took a hit from the closure of stores and parlors.
Advancing issues outnumbered decliners 1.36-to-1 on the
NYSE, while declining issues outnumbered advancers 1.07-to-1 on
the Nasdaq.
The S&P index recorded 34 new 52-week highs and no new low,
while the Nasdaq recorded 52 new highs and 10 new lows.