* Fed leaves rates unchanged, lowers economic growth forecast
* May producer price index up 0.4 pct vs est 0.3 pct
* Indexes up: Dow 0.26 pct, S&P 0.28 pct, Nasdaq 0.29 pct (Updates with post-Fed trading, comment from Yellen)
By Noel Randewich
June 15 (Reuters) - Wall Street maintained gains on Wednesday after the Federal Reserve left its key interest rate unchanged, soothing investors on edge about an impending vote in Britain on whether to leave the European Union.
The U.S. central bank also lowered its economic growth forecasts for 2016 and 2017 and signaled it still plans two rate increases this year.
While traders had not expected a rate increase this month by the Fed’s Federal Open Market Committee, or FOMC, they have been eager for clues about the health of the economy and the trajectory of future hikes.
Investors have become more nervous ahead of a vote in Britain next week on whether to leave the European Union, with recent opinion polls indicating growing support for such a move.
The S&P 500 was poised to close higher following four straight sessions of losses caused in part by fears that a fractured EU could critically damage an already shaky global economy.
“It is certainly one of the uncertainties that we discussed and that factored into today’s decision,” Fed Chair Janet Yellen said at a news conference.
Major U.S. stock indexes held onto earlier gains following the Fed’s statement.
The CBOE market volatility index, Wall Street’s “fear gauge”, was down 6 percent for the day but was still at elevated levels not seen in over three months.
“This is an FOMC announcement that really speaks to a global weakness and the bottom line is it underscores the fact the U.S. is not an island and the global markets and economy are more interconnected than they have ever been,” said Peter Kenny, Senior Market Strategist at Global Markets Advisory Group in Berkeley Heights, New Jersey.
At 2:55 p.m. (1855 GMT), the Dow Jones industrial average was up 0.26 percent to 17,721.29 points and the S&P 500 had gained 0.28 percent to 2,081.08.
The Nasdaq Composite added 0.29 percent to 4,857.57.
Eight of the 10 major S&P sectors were higher, led by the materials index, up 0.9 percent.
General Electric rose 1.3 percent and provided the biggest boost to the S&P 500. So far in 2016, the S&P 500 is up 2 percent.
Advancing issues outnumbered decliners on the NYSE by 2,151 to 842. On the Nasdaq, 1,846 issues rose and 932 fell.
The S&P 500 index showed 12 new 52-week highs and one new low, while the Nasdaq recorded 33 new highs and 33 new lows. (Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by James Dalgleish)