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* Illumina tumbles on weak preliminary revenue estimate
* Altria rises on Goldman Sachs upgrade
* Ford gains on joining forces with Volkswagen
* Indexes up: Dow 0.49%, S&P 0.19%, Nasdaq 0.28% (Updates prices, changes comments)
By Shreyashi Sanyal
July 12 (Reuters) - The S&P 500 and the Dow Jones Industrial Average hit fresh record highs on Friday, as the indexes continued a strong run for the week on hopes of an interest rate cut this month, while investors waited for the start of the corporate earnings season.
In his two-day testimony before Congress, Federal Reserve Chairman Jerome Powell said the U.S. economy was still under threat from disappointing factory activity, tame inflation and a simmering trade war and that the central bank stood ready to "act as appropriate".
"My belief on why the Fed will likely lower rates in the July meeting is that it will try to assume its responsibilities as the central bank for the world and global economic indicators are not as healthy as in the U.S.," said James Abate, chief investment officer at Centre Asset Management in New York.
Abate said most of the positive catalysts that have driven the market higher, have been priced in and now the focus will shift to the earnings season in the next few weeks.
The second quarter earnings season starts next week against the backdrop of warnings of the U.S.-China trade war hurting corporate profits. S&P 500 companies are expected to report a 0.4% dip in profits from a year earlier, according to Refinitiv IBES data.
Results from transport companies next week will also help investors gauge the impact of the trade war on the transportation sector, which is considered as a barometer of U.S. economic health.
The S&P 500 traded above the 3,000 level for the third straight session, also boosted by a 0.44% gain in the technology sector, the S&P 500's best performer so far this year. Apple Inc led the gainers.
The healthcare sector fell 1.02%, the most among the 11 major S&P sectors, weighed down by a 15.11% tumble in Illumina Inc. The gene sequencing company's preliminary second-quarter revenue came in below analysts' estimates.
The Dow was up 132.90 points, or 0.49%, at 27,220.98 and the S&P 500 was up 5.73 points, or 0.19%, at 3,005.64.
The Nasdaq Composite was up 22.94 points, or 0.28%, at 8,218.98.
Keeping investors on edge was Beijing's threat to impose sanctions on U.S. firms that sell arms to Taiwan after Washington approved possible sales of $2.2 billion in tanks, missiles and related equipment.
Altria Group Inc rose 1.30% on a report that Goldman Sachs upgraded the Marlboro maker's stock to "buy" from "neutral".
Ford Motor Co gained 2% after the automaker and Volkswagen AG joined forces to develop autonomous and electric cars.
A Labor Department report showed U.S. producer prices rose slightly in June, leading to the smallest annual increase in producer inflation in nearly 2-1/2 years.
Advancing issues outnumbered decliners for a 1.59-to-1 ratio on the NYSE and a 1.61-to-1 ratio on the Nasdaq.
The S&P index recorded 39 new 52-week highs and two new lows, while the Nasdaq recorded 58 new highs and 29 new lows. (Additional reporting by Manas Mishra in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)