(For a Reuters live blog on U.S., UK and European stock

markets, click or type LIVE/ in a news window.)

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Morgan Stanley ( MS ) up after higher Q4 profits

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UnitedHealth ( UNH ) falls on missing quarterly sales estimates

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Investors parse retail sales, jobless claims data

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Indexes: Dow down 0.16%, S&P 500 off 0.03%, Nasdaq slips

0.07%

(Updates for market open)

By Johann M Cherian and Sukriti Gupta

Jan 16 (Reuters) -

Wall Street's main indexes took a pause on Thursday

following strong gains in the previous session, helped by a

batch of bumper earnings from major banks, while investors

assessed data to gauge the outlook for interest rate cuts this

year.

Morgan Stanley ( MS ) added 1.6% after the lender said

earnings increased

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

while Bank of America ( BAC ) gave up early gains and was last

down 0.2% in choppy 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," 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 added.

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.

At 9:54 a.m. ET, the Dow Jones Industrial Average

fell 68.82 points, or 0.16%, to 43,152.73, the S&P 500

lost 1.49 points, or 0.03%, to 5,948.42 and the Nasdaq Composite

lost 12.88 points, or 0.07%, to 19,498.35.

Six of the 11 S&P 500 sectors rose, led by utilities'

0.7% rise, while consumer discretionary stocks

lost 0.6%.

Weighing on the blue-chip Dow was UnitedHealth ( UNH )

that lost 2.8% after the insurer reported

fourth-quarter revenue below estimates.

Economic data on Thursday was mixed with a report

showing

retail sales

increased 0.4% in December, below a 0.6% rise economists

polled by Reuters had expected, while another report showed the

number of

jobless claims

rose more than expected in the week ended Jan. 11.

The yield on the benchmark 10-year Treasury note

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

4.655%.

Traders now see the Federal Reserve cutting interest

rates by 25 basis points by September, according to data

compiled by LSEG. They had all but priced out any reductions for

2025 earlier in the week.

On Capitol Hill, Senate confirmation hearings are underway

for Trump's Cabinet picks and Treasury secretary nominee Scott

Bessent will face questions at 10:30 a.m. ET.

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

rose 5.8% 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% and Broadcom ( AVGO )

added 3.7%, sending the broader chip index up

1%.

Advancing issues outnumbered decliners by a 1.05-to-1

ratio on the NYSE and by a 1.26-to-1 ratio on the Nasdaq.

The S&P 500 posted 11 new 52-week highs and eight new

lows, while the Nasdaq Composite recorded 31 new highs and 59

new lows.