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June retail sales stronger than expected

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BofA profit beats expectation

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UnitedHealth ( UNH ) rises after Q2 profit beats estimates

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Match up on report activist investor Starboard built stake

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Indexes up: Dow 0.97%, S&P 0.36%, Nasdaq 0.18%

(Updated at 9:56 a.m. ET/ 1356 GMT)

By Lisa Pauline Mattackal and Ankika Biswas

July 16 (Reuters) -

The Dow led Wall Street's main indexes higher on Tuesday,

boosted by UnitedHealth's ( UNH ) strong results and as unexpectedly

robust retail sales data signaled a still-resilient U.S.

economy, but did little to dampen rate-cut bets.

UnitedHealth Group ( UNH ) jumped 4.3% following a

second-quarter profit beat, lifting the blue-chip Dow and

the S&P 500 Health Care index to all-time highs.

Among other corporate earnings, Bank of America ( BAC )

jumped 3.6% after an upbeat net interest-income forecast and

better-than-expected second-quarter profit, steering the S&P 500

Financials index to a record high.

Morgan Stanley ( MS ) fell 1% after its wealth

management revenue missed estimates, while Charles Schwab ( SCHW )

slumped 7% after posting lower net income.

A Commerce Department report showed

retail sales

were unchanged in June, when they were expected to fall

0.3%, while retail sales minus automobiles jumped 0.4%, versus

forecasts of a flat reading.

However, traders are fully pricing in a rate reduction

by September, with the odds of a 25-basis-point cut standing at

93%, according to the CME's FedWatch tool.

"Investors, at first, were likely disappointed because

it might not assist in helping the Fed make a decision about

cutting rates. But at the same time, it's offering comfort that

the U.S. economy is not headed toward recession anytime soon,"

said Sam Stovall, chief investment strategist, CFRA Research.

"The momentum trade will likely continue, especially

with a broadening into the smaller cap companies within the U.S.

investor marketplace."

The small-cap Russell 2000 index jumped 2% to its

highest level since January 2022, as investors continue to move

away from heavily weighted tech stocks, which have driven much

of Wall Street's rally this year.

Strong bets on a rate cut by the U.S. Federal Reserve in

September and a second term for presidential candidate Donald

Trump following an assassination attempt had prompted an upbeat

start to the week for Wall Street.

However, Trump-linked stocks retreated after Monday's

rally, with Trump Media & Technology Group ( DJT ) and software

firm Phunware ( PHUN ) losing between 3% and 8%.

Markets read it as a dovish signal when Fed Chairman

Jerome Powell said on Monday that the latest economic data

"add(s) somewhat to confidence" that inflation was returning to

the central bank's 2% target.

At 9:56 a.m. ET, the Dow Jones Industrial Average was

up 388.12 points, or 0.97%, at 40,599.84, the S&P 500 was

up 20.10 points, or 0.36%, at 5,651.32, and the Nasdaq Composite

was up 33.73 points, or 0.18%, at 18,506.29.

Among top megacap movers, Nvidia ( NVDA ) was down 1.6%,

while Amazon.com ( AMZN ) rose 1%.

The S&P 500 Communication Services index jumped

1%, led by an 8.3% rise in Tinder-owner Match, after a

report that activist investor Starboard has a stake of over 6.5%

in the company and was pushing for a possible sale if a

turnaround wasn't successful.

Advancing issues outnumbered decliners by a 3.67-to-1 ratio

on the NYSE, and by a 3.10-to-1 ratio on the Nasdaq.

The S&P index recorded 53 new 52-week highs and three new

lows, while the Nasdaq recorded 200 new highs and 16 new lows.