* Fed reduces asset purchases, upgrades economy assessment
* GDP shows stronger economic growth than expected in Q2
* Dow down 0.02 pct, S&P up 0.2 pct, Nasdaq up 0.6 pct (Updates with reaction to Fed statement)
By Caroline Valetkevitch
NEW YORK, July 30 (Reuters) - The S&P 500 turned higher while the Dow pared losses on Wednesday after the Federal Reserve raised its assessment of the U.S. economy while reiterating it is in no hurry to increase interest rates.
The central bank also, as expected, cut its monthly asset purchases to $25 billion from $35 billion.
Financial shares bounced, with the S&P financial index helping to lead the S&P 500 higher. Shares of Wells Fargo gained 1.4 percent to $52.26.
"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.
That suggests "we are going to start raising rates but it's going to be some time in the first half of 2015 and that is consensus - and consensus gets you a market that rallies," Hogan said.
The Dow Jones industrial average fell 3.75 points or 0.02 percent, to 16,908.36, the S&P 500 gained 3.43 points or 0.17 percent, to 1,973.38 and the Nasdaq Composite added 25.13 points or 0.57 percent, to 4,467.83.
Earlier Wednesday, government data showed gross domestic product grew at a 4 percent annual 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 and less than June's total. (Editing by Nick Zieminski and Bernadette Baum)