* Fed cuts 2014 growth forecast, still confident about recovery
* Amazon CEO Bezos unveils “Fire” smartphone; stock climbs
* FedEx shares hit all-time high after quarterly profit
* Dow up 0.4 pct; S&P 500 up 0.5 pct; Nasdaq up 0.3 pct (Updates prices)
By Angela Moon
NEW YORK, June 18 (Reuters) - U.S. stocks rose, with the S&P 500 on track to close at a new record, after the Federal Reserve hinted at a slightly faster pace of interest rate increases starting next year but suggested rates in the long-run would be lower than it had indicated previously.
After a two-day policy meeting, the Fed cut the 2014 economic growth forecast to a range of between 2.1 percent and 2.3 percent from around 2.9 percent.
The Fed also cut its monthly bond purchases to $35 billion a month, a reduction of $10 billion, as widely expected, in connection with its plans to wind down one of its main stimulus programs by the end of the year.
“The decision confirms that a steady-as-she-goes Federal Reserve will complete its quantitative easing exit later this year, but still have to rely more on forward policy guidance due to remaining growth and jobs challenges,” said Mohamed El-Erian, chief economic adviser at Allianz SE in Newport Beach, California.
“Remaining growth and jobs challenges involve achieving economic lift-off that materially reduces long-term unemployment,” El-Erian added.
The Dow Jones industrial average rose 60.05 points or 0.36 percent, to 16,868.54, the S&P 500 gained 9.8 points or 0.5 percent, to 1,951.79 and the Nasdaq Composite added 14.32 points or 0.33 percent, to 4,351.55.
The benchmark S&P 500 was already above its record close of 1,951.27 set on June 9. The index is now up 0.8 percent for the week as investors largely shrugged off mounting tensions in Iraq and focused on a flurry of merger and acquisition activity and better-than-anticipated manufacturing data.
Among the biggest gainers was FedEx Corp, which rose 5.9 percent to $148.52 after hitting an all-time intraday high of $148.58. The world’s No. 2 package delivery company reported better-than-expected quarterly revenue. Its gains helped push the Dow Jones Transportation average up 1.3 percent.
Amazon.com Inc shares jumped 2.9 percent to $334.93 after Chief Executive Officer Jeff Bezos unveiled a “Fire” smartphone with free, unlimited photo storage, jumping into a crowded field dominated by Apple Inc and Samsung Electronics.
Adobe Systems shares shot up 8.1 percent to $73.03. Adobe was the S&P 500’s best performer a day after the maker of Photoshop and Acrobat software reported better-than-expected quarterly profit and revenue.
But the stock of ConAgra Foods slid 7.3 percent to $30.44 after the maker of Hunt’s tomato ketchup and Slim Jim beef jerky warned about fourth-quarter results. (Reporting by Angela Moon; Additional reporting by Jennifer Ablan; Editing by Jan Paschal and Nick Zieminski)