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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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Russell 2000 touches multi-year high

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Indexes: Dow up 1.65%, S&P up 0.34%, Nasdaq down 0.22%

(Updates to 14:14 EDT)

By Stephen Culp

NEW YORK, July 16 (Reuters) -

U.S. stocks were mixed on Tuesday, with the Dow Jones

Industrial Average building on Monday's all-time closing high

after solid retail sales data bolstered expectations that the

U.S. Federal Reserve is close to easing interest rates.

The S&P 500 also rose, but megacap growth stocks, led by

Nvidia Corp ( NVDA ) and Microsoft Corp ( MSFT ), pulled the

tech-heavy Nasdaq lower.

Economically sensitive small caps extended their rally. The

Russell 2000 scored a fifth straight day of gains greater

than 1%, its longest winning streak since April 2000. The index

was last up 2.9%, touching its highest level since January 2022.

Dow transportation stocks also outperformed the

broader indexes as investors increasingly focused on undervalued

areas of the market.

Value stocks, which have underperformed their growth

peers and the broader S&P 500 so far this year, jumped

1.3%.

"This rotation underscores the likelihood of interest rate

cuts as early as September," said Greg Bassuk, CEO at AXS

Investments in New York. "Small cap companies are among the

best-positioned to benefit from rate cuts, and today we're

seeing this trifecta of strong earnings, a resilient economy and

high confidence of a rate cut in September."

Economic data on Tuesday included stronger-than-expected

retail sales reported by the Commerce Department. This provided

reassurance that consumers, responsible for about 70% of U.S.

gross domestic product, have stayed resilient despite

restrictive monetary policy, and eased fears that high interest

rates could tip the economy into recession.

"We are in a Goldilocks environment right now, with

inflation dropping, the economy continuing to perform well, and

slightly better-than-expected corporate earnings," said Oliver

Pursche, senior vice president at Wealthspire Advisors, in New

York.

Second-quarter earnings season is ramping up.

UnitedHealth Group ( UNH ) jumped 5.9% after reporting

consensus-topping profit, lifting the blue-chip Dow and

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

Bank of America's ( BAC ) second-quarter profit beat

expectations, and underwriting fees rose as capital markets

resurged. The second-largest U.S. bank also provided upbeat net

interest income guidance, sending its shares up 5.7%.

Morgan Stanley ( MS ) rose 1.1% even after the investment

bank posted disappointing wealth management revenue.

Charles Schwab ( SCHW ) slid 8.6% after reporting a dip in

interest income.

At 2:14 p.m. ET, the Dow Jones Industrial Average

rose 664.62 points, or 1.65%, to 40,876.34, the S&P 500

gained 19.29 points, or 0.34%, to 5,650.51 and the Nasdaq

Composite dropped 40.90 points, or 0.22%, to 18,431.67.

Of the 11 major sectors in the S&P 500, industrials were

enjoying the largest percentage gains, while technology

and communication services were the only two

in negative territory.

Tinder parent Match jumped 7.8% on news 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 due to post earnings after

the bell.

Advancing issues outnumbered decliners on the NYSE by a

3.90-to-1 ratio; on Nasdaq, a 2.91-to-1 ratio favored advancers.

The S&P 500 posted 88 new 52-week highs and three new

lows; the Nasdaq Composite recorded 277 new highs and 28 new

lows.