Retail sales rise 0.4% in September

TSMC gains after forecasting Q4 revenue jump

Elevance Health ( ELV ) down after cutting annual profit forecast

Netflix ( NFLX ) falls ahead of results

Indexes up: Dow 0.33%, S&P 500 0.18%, Nasdaq 0.39%

Updates to mid-afternoon

By David French

Oct 17 (Reuters)

- Wall Street benchmarks advanced on Thursday, with the S&P 500 and the Dow hovering around record highs, as chip stocks surged on TSMC's upbeat forecast and stronger-than-expected monthly retail sales indicated a robust U.S. consumer.

Taiwan Semiconductor Manufacturing Co ( TSM ) 2330.TW, the world's largest contract chipmaker, beat market estimates for profit and forecast a jump in fourth-quarter revenue, driven by demand for artificial intelligence chips.

The chipmaker's U.S.-listed shares TSM.N soared 11.6%, while AI-trade favorite and TSMC customer Nvidia NVDA.O gained 2.6%, touching a record high.

The optimism spread to other chip stocks, sending the broader Philadelphia SE Semiconductor index .SOX

2.2% higher.

Fresh U.S. data confirmed healthy growth in the world's largest economy, while keeping bets on a 25-basis-point rate cut at the Federal Reserve's next meeting largely intact at 89.4%, according to CME's FedWatch.

U.S. retail sales increased 0.4% in September, slightly more than expected, while weekly jobless claims fell unexpectedly.

As of 2:05 p.m. ET, the Dow Jones Industrial Average was up 140.27 points, or 0.33%, at 43,217.97, on track for the fourth lifetime closing high in five sessions.

The S&P 500 .SPX rose 10.56 points, or 0.18%, to 5,853.03 points, within touching distance of its best ever finish.

The Nasdaq Composite .IXIC advanced 72.23 points, or 0.39%, to 18,439.31.

A broadly upbeat start to the third-quarter earnings season, strong economic data and the Fed kicking off its policy-easing cycle have pushed the Dow and the S&P 500 to fresh record highs, with the benchmark index close to the psychologically important 6,000 mark.

U.S. equity benchmarks have advanced in recent days even as U.S. Treasury yields have crept up. On

Thursday

, the yield on the benchmark 10-year note US10YT=TWEB rose 7.5 basis points to 4.091%.

Interest in U.S. equities will remain strong, Thierry Wizman, global FX & rates strategist at Macquarie Group, projected.

"The fact it's higher yields in the U.S. and the U.S. economy is doing well, much better than the rest of the world, there's still that foreign bid for U.S. stocks that's coming in, and I suspect that's not completely exhausted."

Some money which had chased potential economic stimulus measures in China is likely returning to U.S. assets, Wizman noted.

While the main benchmarks advanced for the second straight day, small cap indexes fell. The Russell 2000 .RUT

and

the S&P Small Cap 600 were down 0.3%, having both closed at their highest in nearly three years on Wednesday.

A majority of S&P 500 sectors were also in negative territory, including rate-sensitive indexes such as utilities .SPLRCU and real estate , which slipped 0.6% and 0.4%, respectively.

In earnings-related moves, insurer Travelers Companies TRV.N

gained 8.1% after its third-quarter profit beat market expectations. Money manager Blackstone Group BX.N rose 7% to a

record high

after its latest numbers also exceeded expectations.

However, health insurer Elevance Health ELV.N plummeted 12.1% after slashing its full-year profit forecast.

Shares of streaming giant Netflix NFLX.O, which is scheduled to report third-quarter earnings after the bell, fell 1.2%.