US STOCKS-Wall Street rises as Fed targets 2% average inflation

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* Coty drops after bigger-than-expected quarterly loss
* Abbott jumps after U.S. marketing nod for $5 COVID-19 test
* Indexes up: Dow 0.92%, S&P 0.46%, Nasdaq 0.13%

(Updates to market open)
By Medha Singh and Devik Jain
Aug 27 (Reuters) - Wall Street's main indexes rose on
Thursday as Federal Reserve Chair Jerome Powell rolled out the
U.S. central bank's aggressive new strategy to restore the
United States to full employment and lift inflation back to
healthier levels.
Under the new approach, the Fed will seek to achieve
inflation averaging 2%, offsetting below-2% periods with higher
inflation "for some time," and to ensure employment doesn't fall
short of its maximum level. "This market these days is all driven by expectations for
more or less Fed liquidity," said Ernesto Ramos, managing
director of active equities at BMO Global Asset Management in
Chicago.
"When you have a liquidity driven market, people are not
buying stocks according to what the underlying pillars of growth
are. Therefore, when that liquidity gets taken away, the whole
house of cards collapses."
The S&P 500 and the Nasdaq have risen to new highs, largely
driven by a tech-related rally at a time when the U.S. economy
is struggling with its worst downturn since the Great
Depression.
Data on Thursday showed weekly jobless claims hovered around
1 million last week, suggesting the labor market recovery was
stalling. At 9:58 a.m. ET, the Dow Jones Industrial Average .DJI was
up 259.60 points, or 0.92%, at 28,591.52, turning positive on
the year for the first time since a coronavirus-driven crash in
March.
The S&P 500 .SPX was up 16.15 points, or 0.46%, at
3,494.88 and the Nasdaq Composite .IXIC was up 14.89 points,
or 0.13%, at 11,679.95.
Economically-sensitive financials .SPSY jumped the most
among the 11 major S&P sectors while tech-focused sectors eased.
Boeing Co BA.N rose 5% after the European Union Aviation
Safety Agency (EASA) announced plans to begin flight tests of
its 737 MAX plane, a move viewed as a key milestone toward its
return to service. Abbott Laboratories ABT.N surged 7.8% after the medical
device maker won U.S. marketing authorization for a $5 rapid
COVID-19 portable antigen test. Cosmetics maker Coty Inc COTY.N shed 6.9% after posting a
bigger-than-expected quarterly loss as demand for its beauty
products took a hit from the closure of stores and parlors.
Advancing issues outnumbered decliners 2.03-to-1 on the NYSE
and 1.20-to-1 on the Nasdaq.
The S&P index recorded 32 new 52-week highs and no new low,
while the Nasdaq recorded 44 new highs and eight new lows.