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June retail sales stronger than expected

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BofA profit beats expectations

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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: Dow up 1.43%, S&P up 0.24%, Nasdaq down 0.35%

(Updated at 12:21 a.m. ET/1621 GMT)

By Lisa Pauline Mattackal and Ankika Biswas

July 16 (Reuters) -

Rate-sensitive small-cap stocks led Wall Street higher on

Tuesday after retail sales data did little to dampen hopes of a

September rate cut, while UnitedHealth's ( UNH ) results lifted the Dow

to a record high.

UnitedHealth Group ( UNH ) jumped 5.1% following a

second-quarter profit beat. The stock was the biggest gainer on

the blue-chip Dow and lifted the S&P 500 Health Care

index to an all-time high.

A Commerce Department report showed

retail sales

were unchanged in June, when they were expected to fall

0.3%. Retail sales minus automobiles jumped 0.4%, versus

forecasts of a flat reading.

However, traders continued to fully price 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.

Those bets helped drive a move away from megacap tech

stocks to market sectors that have lagged the benchmark index

this year, with the small-cap Russell 2000 index rising

2.4% to its highest level since January 2022, and the S&P 500

Value index gaining 1.1%.

"Small caps have had a significant headwind of higher

interest rates for quite some time. That's already in the

rearview mirror at this point. Now, the U.S. is about to embark

on cutting rates, probably at the (Fed's) September meeting,"

said Jason Pride, chief of investment strategy and research at

Glenmede.

The Russell 2000 was on pace for its fifth straight

session of gains of 1% or more - its first such streak in more

than four years. Other economically sensitive sectors including

industrials, materials and real estate also rose.

The move potentially heralds a sustained rotation away

from big tech into the market's underperforming sectors, which

many participants have called for even as tech stocks drove Wall

Street to record highs this year.

Most megacap stocks slipped, with Nvidia ( NVDA ),

Microsoft ( MSFT ) and Meta Platforms ( META ) falling over 1%

each. The S&P Information Technology index led sector

declines.

"In the near term, it's a very reasonable expectation

that there's going to be volatility between the two sides - the

big megacap growth stories and the rest of the market... but

we're probably going to move on the average away from the

larger-cap companies," Pride said.

Among other corporate earnings, Bank of America ( BAC )

jumped 5.3% 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 ) rose 2.7% following results, while

Charles Schwab ( SCHW ) slumped 8.7% after posting lower net

income.

At 12:21 a.m. ET, the Dow Jones Industrial Average

was up 575.90 points, or 1.43%, at 40,787.62, the S&P 500

was up 13.79 points, or 0.24%, at 5,645.01, and the Nasdaq

Composite was down 64.84 points, or 0.35%, at 18,407.73.

Tinder owner Match jumped 9.1% after a report

that activist investor Starboard has a stake of over 6.5% in the

company.

Interactive Brokers ( IBKR ) and J.B. Hunt Transport

Services were among those scheduled to report results

after markets close.

Advancing issues outnumbered decliners by a 3.80-to-1 ratio

on the NYSE, and by a 2.86-to-1 ratio on the Nasdaq.

The S&P index recorded 84 new 52-week highs and three new

lows, while the Nasdaq recorded 260 new highs and 24 new lows.