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Bank of America ( BAC ), Morgan Stanley ( MS ) up after higher Q4 profits

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UnitedHealth ( UNH ) falls on missing quarterly sales estimates

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Rate-cut bets intact after retail sales, jobless claims

data

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Futures: Dow down 0.3%, S&P 500 up 0.1%, Nasdaq up 0.3%

(Updates before markets open)

By Johann M Cherian and Sukriti Gupta

Jan 16 (Reuters) - The benchmark S&P 500 was set for a

subdued open on Thursday following strong gains in the previous

session, as investors assessed softer-than-expected retail sales

data and a set of strong bank earnings.

At 8:38 a.m. ET, Dow E-minis were down 138 points,

or 0.32%, S&P 500 E-minis were up 0.1% to 5,994.75 points and

Nasdaq 100 E-minis were up 60.75 points, or 0.3%.

A Commerce Department report showed

retail sales

increased 0.4% in December, compared with a 0.6% rise

economists polled by Reuters had expected.

The number of Americans filing new applications for

unemployment benefits

also increased more than expected last week, but remained

at levels consistent with a healthy labor market.

The yield on the benchmark 10-year Treasury note

has eased from its 14-month high and was last at

4.674%.

Traders now see the Federal Reserve cutting interest

rates by 25 basis points in July, according to data compiled by

LSEG. They had all but priced out any reductions for 2025

earlier in the week.

Morgan Stanley ( MS ) added 2.2% in after the lender

said

earnings increased

, fueled by a wave of dealmaking in the fourth quarter,

while Bank of America ( BAC ) edged 0.3% higher in choppy

premarket trading. The country's second-largest bank predicted

higher

interest income

in 2025.

"A lighter regulatory touch would usher in the ability

to raise dividends and to do buybacks for some of the big money

setter banks which has been impaired for several years," said

Art Hogan, chief market strategist at B Riley Wealth.

However, "some of that positive news was pulled forward

yesterday, so you leave little room for more upside (in

shares)," Hogan said.

In the previous session, Wall Street's main indexes

logged their biggest one-day jump since Nov. 6 after data

indicated that underlying inflation was subsiding and three of

the country's biggest banks reported bumper results.

The S&P 500 banks index and the regional banks

index have outperformed Wall Street's top indexes so far

in January, as investors anticipate a favorable business

environment for the sector under President-elect Donald Trump.

The sentiment was reiterated by bank CEOs on Wednesday.

Of the 28 companies in the S&P 500 that have reported

fourth-quarter earnings as of Wednesday, 82.1% have surpassed

estimates, according to data compiled by LSEG.

On Capitol Hill, Senate confirmation hearings are underway

for Trump's Cabinet picks and Treasury secretary nominee Scott

Bessent will face questions on his plans to implement the

president-elect's proposals on tariffs, tax-cuts and

deregulation at 10:30 a.m. ET.

Dow component UnitedHealth ( UNH ) dropped 4% after the

insurer reported fourth-quarter revenue below estimates.

U.S.-listed shares of Taiwan Semiconductor Manufacturing Co

rose 5.4% after the company posted a record quarterly

profit on surging demand for chips used in artificial

intelligence processing.

Other chip stocks Nvidia ( NVDA ) rose 1.4% and Broadcom ( AVGO )

added 2.7%.