(Repeats story first published Friday with no changes to text)

By David Randall and Lewis Krauskopf

NEW YORK, June 14 (Reuters) - Elevated U.S. interest

rates are pressuring the U.S. retail sector, where shares of

many companies have been dented by months of tight monetary

policy while a select few have soared.

The S&P 500 Consumer Discretionary Distribution & Retail

index is up nearly 14% this year, roughly keeping pace

with the S&P 500's year-to-date gain. Much of the sector's

strength, however, has been concentrated in a small group of

stocks, including heavyweight Amazon.com ( AMZN ), which is up

nearly 21% this year.

Meanwhile, shares of companies focused on lower-income

consumers have struggled, in-part because buyers in that segment

have been more affected by elevated interest rates, analysts

said. Among the biggest laggards are shares of Dollar Tree ( DLTR )

, which are down nearly 27% year-to-date and Dollar

General ( DG ), which have fallen nearly 9%.

The retail sector is one of several areas of the economy -

in addition to real estate and consumer staples - that have been

pressured by elevated rates. The Federal Reserve earlier this

week reiterated that it needs to see more evidence of cooling

inflation before lowering borrowing costs.

"The lower to mid-income segment is getting squeezed because

of gas prices and groceries," said Greg Halter, director of

research at Carnegie Investment Counsel. "They feel bad even

though the economy is doing well."

The consumer will be in focus next week when the U.S.

reports retail sales data on Tuesday. Analysts polled by Reuters

expect retail sales to have grown by 0.2% in May.

Weaker-than-expected results - following data earlier this week

showing encouraging progress on inflation - could bolster the

case for the Fed to ease rates sooner rather than later.

Futures markets have reflected increased investor

expectations of a September rate cut, though the Fed projected

it will only lower borrowing costs in December.

The divergent performance of retail stocks has pushed

investors to focus on companies whose consumers can continue to

withstand higher interest rates or those that offer discounts on

name-brand household items like clothing or groceries, such as

warehouse club company Costco Wholesale ( COST ).

Halter's fund has been buying shares of companies such as

Walmart ( WMT ), Costco, and TJX Companies ( TJX ) whose

business models emphasize value for the consumer. Their shares

are up 28%, 29% and 16% respectively.

Robert Pavlik, senior portfolio manager at Dakota Wealth

Management, said he has owned Costco and TJX Companies ( TJX ), pointing

to their strong management and inventory controls.

"I think inflation will remain but moderate and consumers

will still look to get the most out of their dollars," he said.

Bokeh Capital Partners owns shares of Urban Outfitters ( URBN )

, which are up over 20% this year. Kim Forrest, Bokeh's

chief investment officer, said Urban Outfitters' ( URBN ) strength as a

fashion merchandiser has helped the company weather the

inflationary environment, adding "people will sacrifice to look

good."

Josh Cummings, a portfolio manager at Janus Henderson

Investors, believes areas such as online shopping will continue

to thrive even if interest rates stay elevated.

He has been targeting companies such as Carvana ( CVNA ),

whose shares have nearly doubled this year, and DoorDash ( DASH )

, whose shares are up around 13%.

"We're not terribly excited about the consumer sector

overall, but we do think we are in the early innings of some of

these growth stories," he said.