Boeing, bank stocks lift Dow, techs weigh on S&P, Nasdaq

By Rama Venkat Raman

(Reuters) - The Dow Jones Industrial Average edged higher on Tuesday, with a 3 percent jump in shares of Boeing and rise in financial stocks, while losses in technology stocks weighed on the S&P 500 and the Nasdaq.

Boeing shares hit a record high at $292.80 after the company said it would raise its quarterly dividend by 20 percent and replace its existing share buyback program with a new $18 billion authorization.

JPMorgan and Goldman Sachs gained about 1 percent each, lifting the financial stocks, ahead of the rate setting meeting of the Federal Reserve.

At 9:35 a.m. ET (1435 GMT), the Dow Jones Industrial Average was up 73.51 points, or 0.3 percent, at 24,459.54 and the S&P 500 was up 1.16 points, or 0.04 percent, at 2,661.15. The Nasdaq Composite was down 6.62 points, or 0.1 percent, at 6,868.46.

The Fed is widely expected to raise its benchmark interest rate for third time this year at the end of the meeting on Wednesday. Traders see an 87.6 percent chance of a 25 basis point rate hike, according to CME Group's Fedwatch tool.

Investors will watch for the central bank's forecast on future rate hikes and the view on the health of the economy.

"Investors are presented with an interesting economic outlook. They are looking at a positive set of economic data in an improving economy, with some hesitation with regards to Federal Reserve, given the change in leadership," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.

Though the current Fed Chair, Janet Yellen, will continue until February, her final press conference on Wednesday afternoon will set the policy backdrop that incoming chair Jerome Powell inherits.

A Labor Department report showed U.S. producer prices rose in November as gasoline prices surged and the cost of other goods increased, leading to the largest annual gain in nearly six years and pointing to a broad acceleration in wholesale price pressures.

Comcast shares rose about 2.3 percent after the company abandoned its bid for most of the assets of Twenty-First Century Fox, leaving Walt Disney as the sole suitor of the $40 billion-plus deal.

Fox and Disney were on 'glide path' for an announcement of an all-stock deal on Thursday and the Fox spinoff entity would be worth about $10 per share, CNBC reported, citing sources familiar with the deal.

Advancing issues outnumbered decliners on the NYSE by 1,475 to 1,006. On the Nasdaq, 1,398 issues rose and 961 fell.

(Reporting by Rama Venkat Raman in Bengaluru; Editing by Arun Koyyur)