US STOCKS-Wall St slightly higher on Microsoft results, rate cut hopes

* Microsoft rises after solid growth in cloud business
* Technology biggest boost to S&P 500
* Kansas City Southern gains on profit beat
* American Express falls as expenses rise
* Indexes up: Dow 0.30%, S&P 0.11%, Nasdaq 0.18%

(Updates to early afternoon)
By Medha Singh
July 19 (Reuters) - Wall Street's main indexes edged higher
on Friday after solid results from technology giant Microsoft
added to an upbeat mood following hints from a top Federal
Reserve official that a U.S. interest rate cut could be
imminent.
Microsoft Corp MSFT.O , the most valuable U.S. company,
rose 1.5% as strength in its cloud business helped it beat
estimates at the end of a week of mixed earnings. The gains also lifted the technology sector .SPLRCT 0.53%,
making it one of the six major S&P indexes trading higher.
"Microsoft is a sign that not all companies are suffering
from the downturn we're seeing in manufacturing or the pressure
from interest rates that's affecting financials," said Jeff
Kleintop, chief global investment strategist, at Charles Schwab
in Boston.
Second-quarter profits at S&P 500 companies are now
estimated to rise 1%, according to Refinitiv IBES data, in a
reversal from earlier expectations of a small drop.
Remarks from the New York Fed President John Williams, a
permanent voting member of the Fed's policy setting committee,
that the U.S. central bank cannot wait for economic disaster to
unfold and must add stimulus early were behind Thursday's
positive close. Traders have raised bets for a larger, half-percentage point
cut in rates at the July 30-31 policy meeting to 43%, from a 23%
chance a week ago, according to CME Group's FedWatch program.
Gains in Boeing Co BA.N also propped up the blue-chip Dow
Industrials .DJI and the benchmark S&P 500 .SPX .
The planemaker disclosed it would take a $4.9 billion
after-tax hit due to estimated disruptions from the grounding of
its 737 MAX, but shares gained 4.2% indicating that investors
had expected worse. At 12:35 p.m. ET, the Dow Jones Industrial Average .DJI
was up 81.07 points, or 0.30%, at 27,304.04, the S&P 500 .SPX
was up 3.24 points, or 0.11%, at 2,998.35. The Nasdaq Composite
.IXIC was up 14.53 points, or 0.18%, at 8,221.77.
The main indexes have eased off all-time highs hit at the
start of this week as some of the first batches of
second-quarter earnings releases pointed to a slowdown in growth
under the shadow of U.S.-China trade tensions.
The defensive real estate .SPLRCR and utilities .SPLRCU
sectors posted the biggest losses.
Kansas City Southern KSU.N shares rose 3.8% after the
railroad operator posted a better-than-expected quarterly
profit. Its shares helped the Dow Jones Transport index .DJT
gain about 0.94%.
Credit card issuer American Express Co AXP.N slipped 2.3%
after warning of higher operating costs this year as it spends
heavily on rewards programs to attract customers. issues outnumbered decliners for a 1.30-to-1 ratio
on the NYSE and a 1.21-to-1 ratio on the Nasdaq.
The S&P index recorded 45 new 52-week highs and five new
lows, while the Nasdaq recorded 64 new highs and 63 new lows.