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US STOCKS-Wall Street extends record-setting rally; FedEx drops

Uday Sampath Kumar and C Nivedita

* S&P 500, Nasdaq hit new record highs

* FedEx tumbles 9% after cutting profit forecast

* Trump impeachment vote in focus

* Indexes: Dow flat, S&P up 0.1%, Nasdaq up 0.2% (For a live blog on the U.S. stock market, click or type LIVE/ in a news window.)

Dec 18 (Reuters) - The S&P 500 and Nasdaq inched to all-time highs on Wednesday, extending a record-setting run as investors' optimism about the global economy remained strong, while a steep drop in FedEx shares limited further gains.

All three major indexes were on pace for their sixth straight session of gains, building on a rally kicked off last week by expectations of an initial U.S.-China trade deal.

Analysts said the trade agreement, announced on Friday, removed a major risk for global equity markets, leaving stocks with slightly more room to rise in what is left of 2019.

"The trade truce with China has really set the backdrop for a continued move higher to the end of the year," said Chris Zaccarelli, Chief Investment Officer, Independent Advisor Alliance, Charlotte, North Carolina.

"I don't see a huge rally, just a slow drip."

The benchmark S&P 500 hit its fifth consecutive record high on Wednesday, its longest streak since January 2018.

However, holding back gains on the index was a near 10% drop in FedEx shares after the U.S. parcel delivery company lowered its fiscal 2020 profit forecast on heavy expenses, slowing global trade and the fallout from its breakup with Amazon.com Inc.

The profit warning from FedEx pressured shares of rival United Parcel Service Inc, with the Dow Jones Transport Average down 1.1%.

The market has also largely shrugged off the almost certain impeachment of President Donald Trump as the House of Representatives gears up for a historic vote later in the day on two charges accusing him of abusing his power and obstructing Congress.

Trading history during the impeachment of President Bill Clinton and the resignation of President Richard Nixon suggests Wall Street has little to worry about.

At 11:57 a.m. ET the Dow Jones Industrial Average was up 1.44 points, or 0.01%, at 28,268.60, the S&P 500 was up 2.41 points, or 0.08%, at 3,194.93 and the Nasdaq Composite was up 19.75 points, or 0.22%, at 8,843.11.

The healthcare sector was boosted by Eli Lilly & Co , which gained 3.4% after Morgan Stanley upgraded the stock to "overweight".

Advancing issues outnumbered decliners by a 1.24-to-1 ratio on the NYSE and for a 1.02-to-1 ratio on the Nasdaq.

The S&P index recorded 32 new 52-week highs and no new low, while the Nasdaq recorded 113 new highs and 40 new lows.

(Reporting by Uday Sampath, C Nivedita and Abhishek Manikandan in Bengaluru Editing by Saumyadeb Chakrabarty and Shinjini Ganguli)