US STOCKS-S&P, Dow head higher on new Fed stance, COVID progress

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* Rate-sensitive financials take lead after Powell remarks
* Walmart, Microsoft announce joint bid for TikTok's U.S.
assets
* Boeing rises as European regulator to begin 737 Max tests
* Indexes mixed: Dow up 0.75%, S&P up 0.29%, Nasdaq down
0.18%

(Updates to late afternoon, changes dateline, byline)
By Stephen Culp
NEW YORK, Aug 27 (Reuters) - The S&P 500 and the Dow
advanced on Thursday as investors digested the U.S. Federal
Reserve's new strategy to adopt an average inflation target and
restore the United States to full employment, as well as a
promising development in the fight against COVID-19.
The Fed's new strategy sent Treasury yields higher, which
gave a lift to interest rate-sensitive financials .SPSY .
The sector provided the biggest boost to the S&P 500 and
the Dow, helping to put the former on track for a new record
closing high and edging the latter closer to reclaiming positive
territory for the year so far.
The Dow remains more than 3% below its record high reached
in February.
Declines in market-leading momentum stocks capped the S&P's
gains and held the Nasdaq in the red.
Shares of Abbott Laboratories ABT.N jumped 7.9% after the
company won U.S. approval to market a cheap, portable, rapid
COVID-19 antigen test, which could be a step toward containing
the pandemic that sent the U.S. economy spiraling into
recession. Economic recovery was forefront in Fed Chairman Jerome
Powell's remarks made as part of the Kansas City Fed's virtual
Jackson Hole symposium. In the speech Powell outlined the
central bank's aggressive new strategy to support the economy by
lifting inflation and returning the economy to full employment.
"We're going to have low interest rates as far as we can see
and COVID is on the way out because of the inexpensive test that
Abbot is introducing soon," said Peter Tuz, president of Chase
Investment Counsel in Charlottesville, Virginia. "It gives
investors two reasons to be positive about equities."
But with last week's initial jobless claims stubbornly
hovering above the 1 million mark, according to the Labor
Department, a return to full employment currently appears to be
a long haul. The Dow Jones Industrial Average .DJI rose 211.78 points,
or 0.75%, to 28,543.7, the S&P 500 .SPX gained 10.01 points,
or 0.29%, to 3,488.74 and the Nasdaq Composite .IXIC dropped
21.48 points, or 0.18%, to 11,643.58.
Of the 11 major sectors in the S&P 500, financials enjoyed
the biggest percentage gain while communications services
.SPLRCL , weighed down by Netflix Inc NFLX.O and Facebook Inc
FB.O , lagged.
Shares of Walmart Inc WMT.N and Microsoft Corp MSFT.O
rose 5.3% and 2.7%, respectively after announcing a joint bid
for TikTok's U.S. assets.
Luxury retailer Tiffany & Co TIF.N advanced 1.9% after
reporting stronger-than-expected profit just days after delaying
its $16.2 billion sale to France's LVMH LVMH.PA . On the other end of the retail scale, discount stores Dollar
General Corp DG.N and Dollar Tree Inc DLTR.O also beat
quarterly profit expectations. Boeing Co BA.N rose 1.4% after the European Union Aviation
Safety Agency announced plans to begin flight tests of its
grounded 737 MAX plane.
Cosmetics maker Coty Inc COTY.N plunged 8.7% after retail
closures and weak demand led to a bigger-than-expected quarterly
loss. Advancing issues outnumbered declining ones on the NYSE by a
1.05-to-1 ratio; on Nasdaq, a 1.30-to-1 ratio favored decliners.
The S&P 500 posted 37 new 52-week highs and no new lows; the
Nasdaq Composite recorded 58 new highs and 20 new lows.