* Fed expected to dial back rhetoric on reducing stimulus
* Boeing shares hit new 5 1/2-year high
* Indexes up: Dow 0.8 pct, S&P 0.7 pct, Nasdaq 0.8 pct
By Alison Griswold
NEW YORK, June 18 (Reuters) - U.S. stocks climbed on Tuesday, led by growth-oriented sectors, as investors took an optimistic view that the Federal Reserve will temper recent statements pointing to the future reduction of U.S. monetary support.
Shares of industrial, technology and consumer discretionary companies rallied on expectations that the Fed will maintain its current level of bond purchases when it issues its policy statement Wednesday. General Electric gained 1.9 percent to $24.21 and was the fourth most actively traded stock on the New York Stock Exchange.
The Fed's two-day meeting started Tuesday, and traders are trying to anticipate the Fed's timeline for winding down purchases of $85 billion per month of bonds, known as quantitative easing, that have underpinned the S&P 500's rally to all-time highs in May.
The expectation is that the Fed will dial back its rhetoric on tapering to ease "hysteria" in the markets since talk of reducing stimulus heated up in May, said Peter Kenny, chief market strategist at Knight Capital in Jersey City, New Jersey.
However, the growing belief that the Fed will not throttle back its stimulus may be positioning the market for a selloff tomorrow, with people already betting against any "bad" news from the central bank, said Uri Landesman, president of Platinum Partners in New York.
"Odds are the news isn't as good as what people are expecting," he said.
The market has been volatile since Fed Chairman Ben Bernanke said on May 22 the Fed could begin to trim its stimulus in the "next few meetings" if the economy gains momentum and inflation remains moderate. Intraday swings have widened, although the S&P 500 closed on Monday less than 1 percent below the May 22 close.
Consumer prices rose slightly last month, the government said on Tuesday, giving the deflation-wary Fed some respite. The consumer price index, excluding food and energy, advanced 1.7 percent in the 12 months since May, indicating inflation pressures remain subdued.
The S&P 500 is forecast to end 2013 at 1,700, according to the median forecast from 42 analysts surveyed by Reuters in the past week. That 19 percent gain for 2013 would mark the best year since 2009.
The Dow Jones industrial average rose 126.14 points or 0.83 percent, to 15,305.99, the S&P 500 gained 11.37 points or 0.69 percent, to 1,650.41 and the Nasdaq Composite added 28.68 points or 0.83 percent, to 3,480.81.
Boeing launched a larger version of its flagship Dreamliner aircraft at the Paris Airshow on Tuesday, sharpening the battle with rival Airbus in the market for fuel-efficient, long-distance jets. Boeing shares rose 0.7 percent to $103.80, a 5 1/2-year high.
Shares of Walter Energy Inc partly rebounded to $13.65 after a two-day selloff triggered by news that the company pulled a planned $1.55 billion credit refinancing.