* S&P 500 on track to erase 2016 losses
* Adobe up after raising FY forecasts
* JPMorgan, Bank of America up on buyback plans
* Indexes up: Dow 0.71 pct, S&P 0.46 pct, Nasdaq 0.48 pct (Updates to late afternoon)
By Laila Kearney
NEW YORK, March 18 (Reuters) - Major U.S. stock indexes were on track for a fifth week of gains on Friday afternoon, as the U.S. Federal Reserve’s dovish tone and a strengthening economic outlook compelled investors to take on more risk.
In part, the rally was a continued reaction to the Fed’s move on Wednesday, in which it scaled back expectations for the number of rate hikes in the coming months.
“It was a huge gift to the market,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. “I think the market was bracing for a more hawkish view.”
The S&P 500 was poised to close positive for the year for the first time in 2016. The Dow Jones industrial closed with gains for the year on Thursday.
Following the Fed move, the dollar weakened and drove up commodity prices. Oil rose above $42 a barrel.
Crude oil dipped slightly on Friday as traders booked profits after strong seasonal demand and hopes that major producers would reach an agreement to freeze production pushed prices to their highest levels of the year.
Stronger-than-expected economic data, such as recent jobs and wages reports, and improved expectations for corporate earnings, have also eased recession fears and emboldened investors, Luschini said.
The Dow Jones industrial average was up 124.64 points, or 0.71 percent, to 17,606.13, the S&P 500 had gained 9.38 points, or 0.46 percent, to 2,049.97 and the Nasdaq Composite had added 22.87 points, or 0.48 percent, to 4,797.85.
Six of the 10 major S&P sectors were higher, led by a 1.27 percent rise in the healthcare sector.
Bank of America and JPMorgan were up about 2.6 percent after they announced share buyback programs, giving the biggest boost to the S&P 500.
Tiffany & Co shares were up 1.8 pct at $71.40 after the luxury jewelry company’s profit beat estimates.
Shares of Adobe were up 3.8 percent at $93.40 after the Photoshop maker raised its full-year profit and revenue forecasts above expectations.
Starwood Hotels & Resorts was up 4.9 percent at $80.15 after receiving what it deemed a superior takeover offer from China’s Anbang Insurance Group and said it planned to end a deal with Marriott. Shares of Marriott were up 2.1 percent at $73.30.
Volumes were slightly higher than usual on account of “quadruple witching,” the expiry of options on stocks and indexes as well as futures on indexes and stocks.
Advancing issues outnumbered declining ones on the NYSE by 1,789 to 1,222, for a 1.46-to-1 ratio on the upside; on the Nasdaq, 1,832 issues rose and 947 fell for a 1.93-to-1 ratio favoring advancers.
The S&P 500 posted 45 new 52-week highs and 2 new lows; the Nasdaq recorded 81 new highs and 37 new lows. (Additional reporting by Abhiram Nandakumar in Bengaluru, Saqib Iqbal Ahmed in New York; Editing by Don Sebastian and Nick Zieminski)