US STOCKS-Nike and banks lift S&P 500 to record high

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.)

* Nike surges to record after strong profit forecast

* FedEx slips after missing 2022 earnings forecast

* Virgin Galactic soars on approval for space tourism

* Indexes: Dow +0.68%, S&P 500 +0.30%, Nasdaq -0.04% (Updates with afternoon trading)

June 25 (Reuters) - The S&P 500 hit a record high on Friday, lifted by Nike and several banks, while weaker-than-expected inflation data eased worries about a sudden tapering in stimulus by the Federal Reserve.

Nike Inc surged 15% to an all-time high after the sneaker maker forecast fiscal full-year sales ahead of Wall Street estimates, helping the Dow lead among the three main indexes.

Bank of America and Wells Fargo each jumped more than 2% after the Fed announced big banks have cleared stress test and will no longer face pandemic-related restrictions on buying back stock and paying dividends.

The S&P 500 financials index rose 1.2%, the top performer among 11 sector indexes.

“Today is a bit of profit-taking in tech and a reallocation into the banks after the results of the stress tests,” said Dennis Dick, a proprietary trader at Bright Trading LLC, adding he expects banks to soon announce increased dividends.

A bipartisan Senate deal on infrastructure spending embraced by U.S. President Joe Biden on Thursday continued to lift stocks, with the materials and industrials indexes up about 0.5% each, helping the S&P 500 outperform the Nasdaq.

“The positive news from the infrastructure package favors the S&P 500 more than then Nasdaq. The Nasdaq does not pour cement into roads and put steel in bridges. That’s the S&P 500,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

The latest personal consumption expenditures (PCE) data showed a measure of underlying inflation rose less than expected in May. Core PCE rose 3.4% year-over-year as expected, above the Fed’s 2% flexible target.

Investors were also girding for potentially the biggest trading event of the year, as FTSE Russell reconstitutes its indexes which could reflect a wild trading year marked by the pandemic and a “meme” stock craze.

The Dow Jones Industrial Average was up 0.68% at 34,430.45 points, while the S&P 500 gained 0.30% to 4,279.28.

The Nasdaq Composite dropped -0.04% to 14,363.87.

FedEx Corp dropped 3.7% after the U.S. delivery firm missed 2022 earnings forecast due to hiring difficulties.

CarMax Inc jumped 6% after the used-car retailer topped Wall Street estimates for quarterly revenue, helped by strong demand as more people opted for personal vehicles over public transport due to the COVID-19 pandemic.

Billionaire Richard Branson’s spaceship company Virgin Galactic surged 31% after receiving approval from the U.S. aviation safety regulator to fly people to space.

Advancing issues outnumbered declining ones on the NYSE by a 1.51-to-1 ratio; on Nasdaq, a 1.46-to-1 ratio favored advancers.

The S&P 500 posted 23 new 52-week highs and no new lows; the Nasdaq Composite recorded 110 new highs and 10 new lows.

Additional reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Maju Samuel and Aurora Ellis