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By Noel Randewich
(Reuters) - Wall Street ended mixed on Thursday, with a gain in Microsoft offsetting a dip in Apple, a day after the Federal Reserve cut interest rates as expected and left the door open for further monetary easing.
Microsoft <MSFT.O> rose 1.8% after unveiling a $40 billion stock buyback plan, while Apple <AAPL.O> declined 0.8% and the S&P 500 ended virtually unchanged.
The S&P 500 was than less than 1% below its closing record high hit in July as investors became more optimistic about the resumption of talks between the United States and China aimed at laying the groundwork for high-level trade negotiations in early October. A recent easing in trade tensions has helped the three main indexes recover from losses from August.
"There has been slightly more constructiveness lately, but if there is any sort of agreement it will be a very light, mini-deal, because the U.S. and China are still very far apart on the main issues," warned Ben Phillips, chief investment officer at EventShares.
The S&P 500 healthcare index <.SPXHC> climbed 0.5% after U.S. House of Representatives Speaker Nancy Pelosi released a proposal on drug pricing policy.
While the plan is a "big negative" for drugmakers, the stock reaction has already been priced in to some degree, said Thomas Martin, senior portfolio manager at GLOBALT Investments.
Of 11 sector indexes, healthcare is the worst performer so far in 2019, with a gain of 6%.
Expectations of another rate cut by the Fed, following the U.S. central bank's 25-basis-point reduction on Wednesday, also drove sentiment. The Fed, in announcing its second quarter-percentage-point cut this year, said future reductions would be "largely data-dependent."
Traders see a nearly 50% chance for another 25 basis point rate cut in October, according to CME Group's FedWatch tool.
"The market just continues to believe the Fed is going to be accommodative," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.
The Fed injected another $75 billion into the U.S. banking system on Wednesday, restoring a measure of order after the central bank's benchmark interest rate rose above its targeted range for the first time since the financial crisis.
The Dow Jones Industrial Average <.DJI> declined 0.19% to end at 27,094.79 points, while the Nasdaq Composite <.IXIC> crept up 0.07% to 8,182.88. The S&P 500 <.SPX> stood at 3,006.79 points, up less than one point from Wednesday