US STOCKS-Wall St up as geopolitical fears ease, Microsoft jumps

(Corrects to show housing starts dipped from prior month, not rose)

* Putin tells parliament he does not want more of Ukraine

* Fed in view as two-day meeting set to begin

* Microsoft shares rally, near $40 for first time since 2000

* General Motors rises after CEO comments on recalls

* Indexes up: Dow 0.6 pct, S&P 0.7 pct, Nasdaq 1 pct

By Chuck Mikolajczak

NEW YORK, March 18 (Reuters) - U.S. stocks rose for a second straight day on Tuesday, with the S&P moving within 1 percent of record levels after comments from Russian President Vladimir Putin eased concerns that tensions over Ukraine might escalate.

Gains were broad, with all 10 primary S&P 500 sectors higher on the day. Groups tied to the pace of economic growth, including materials, were among the day's biggest advancers, while a rally in Microsoft boosted tech shares more than 1 percent.

Shares of Microsoft Corp rose 4.1 percent to $39.61 as the S&P 500's biggest percentage advancer. It was the biggest daily advance for the software giant since November, and the move took the stock near $40 a share for the first time since July 2000. Late Monday, a source familiar with the matter told Reuters that the company may unveil an iPad version of the company's Office software suite on March 27.

In an address to the Russian parliament, Putin said Russia didn't want Ukraine to be divided further, and that he did not want to seize more of the country after approving plans to make Crimea part of Russia following a disputed referendum.

Late Monday, the United States and the European Union imposed personal sanctions on a handful of officials from Russia and Ukraine who were accused of involvement in Moscow's military seizure of the Black Sea peninsula.

"What had been going on in the Ukraine has been weighing on the minds of investors for a while, so it is a relief that we are apparently moving beyond this," said Joseph Tanious, global market strategist at J.P. Morgan Asset Management in New York.

"While from an economic standpoint the Ukraine doesn't have a major impact on the global economy, there were worries about more tension between Russia and western powers, and how far this kind of standoff could go."

The Dow Jones industrial average was up 95.75 points, or 0.59 percent, at 16,342.97. The Standard & Poor's 500 Index was up 11.99 points, or 0.65 percent, at 1,870.82. The Nasdaq Composite Index was up 43.92 points, or 1.03 percent, at 4,323.87.

With the day's advance, the S&P 500 is less than 1 percent away from an all-time high hit earlier this month. Over the past two sessions, the benchmark index has gained about 1.6 percent.

Investors were looking ahead to a two-day meeting of the U.S. Federal Reserve's policy-setting committee, which begins Tuesday. The central bank is not expected to deviate from previously announced policy plans, but since the Fed's stimulus has kept a floor under equity prices, market participants will be attuned to any hint of a change.

In the latest economic data, consumer prices rose 0.1 percent in February, as expected, while housing starts fell modestly from the previous month.

In company news, Hertz Global Holdings Inc said it would spin off its equipment rental business for $2.5 billion and use part of the proceeds to fund a stock buyback program. Shares fell 0.9 percent to $26.98.

General Motors Co announced new recalls of 1.5 million vehicles on Monday. In an unprecedented public admission by a GM chief executive, Mary Barra acknowledged the company fell short in catching faulty ignition switches linked to 12 deaths. Shares rose 1.1 percent to $35.02.

GameStop Corp shares fell 4.9 percent to $37.79 as the biggest decliner on the S&P 500. Wal-Mart Stores Inc said it would allow shoppers to trade in used video games for anything from groceries to gadgets.

(Editing by Bernadette Baum and Nick Zieminski)