US STOCKS-Wall St back in black as Russell 2000 hits record


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    * Russell 2000 hits all-time high
    * Macy's earnings beat boosts retail sector
    * 10-yr Treasury yields hold near 7-yr peak
    * N. Korea threatens withdrawal from summit
    * 3M weighs on Dow following brokerage downgrade
    * Indexes up: Dow 0.37 pct, S&P 0.55 pct, Nasdaq 0.78 pct

 (Updates to late afternoon, changes dateline to New York,
changes byline)
    By Stephen Culp
    May 16 (Reuters) - Retail and technology stocks led Wall
Street back to positive territory on Wednesday, and the
small-cap Russell 2000 hit a new   intra-day high, even as
traders remained on edge about geopolitics and rising U.S.
interest rates. 
    Smaller companies continued to outperform their larger
rivals with the Russell 2000 reaching a record level. The index
was last up 1.3 percent. 
    "Small caps present a cleaner play than large caps on two
fundamental market drivers: lower corporate taxes and a stronger
US economy," research firm DataTrek wrote in its morning
briefing on Wednesday. 
    Macy's  M.N  shares were up 11.2 percent after beating
analyst estimates and raising guidance.*:nL3N1SN4PD  The S&P
500 Department Store index  .SPLRCRETD  was up 5.4 percent, its
largest daily gain in nearly six months.
    Rival department stores J.C. Penney  JCP.N , Kohl's  KSS.N ,
Nordstrom  JWN.N  and Target Corp  TGT.N  were also boosted by
the results. 
    Macy's earnings pushed the consumer discretionary sector
higher on Wednesday, a day after government data showing an
acceleration of consumer spending fanned inflation concerns and
helped send U.S. government bond yields higher. 
    Yields on U.S. Treasuries were little changed with 10-year
bonds near a 7-year peak, continuing to pressure stocks as
investors consider whether U.S. bonds pose a more attractive
option to riskier equities. 
    "I think bonds are almost becoming an attractive alternative
to equities," said  David Carter chief investment officer, Lenox
Wealth Advisors in New York. "Not yet, in our opinion, but as
yields continue to rise, we may get there soon." 
    Weeks of diplomatic progress were thrown into doubt when
North Korea postponed high-level talks with Seoul and threatened
to pull out of its historic meeting with the United States.*:nL3N1SN1QK 
    The uncertainty compounded investor jitters ahead of United
States-China trade negotiations.
    "Tweets and tariffs are making the market a little
uncomfortable and uncertain," Carter said. "It doesn't help
markets, but it's not necessarily knocking them down."  
    On the economic front, housing starts fell 3.7 percent in
April while new housing permits declined 1.8 percent, according
to the Commerce Department.*:nL2N1SM27Z
    At 2:17PM ET, the Dow Jones Industrial Average  .DJI  rose
92.55 points, or 0.37 percent, to 24,798.96, the S&P 500  .SPX 
gained 14.99 points, or 0.55 percent, to 2,726.44 and the Nasdaq
Composite  .IXIC  added 57.40 points, or 0.78 percent, to
    Of the 11 major sectors of the S&P 500, only rate-sensitive
utilities  .SPLRCU  and real estate  .SPLRCR  stocks were in
negative territory.
    Micron  MU.O  rose 4.6 percent after RBC Capital Markets
initiated coverage of the chipmaker with an "outperform" rating.
    The Philadelphia SE semiconductor index  .SOX  was up 1.3
    Facebook  FB.O  shares were the biggest drag on the S&P 500,
down 0.6 percent, on news that Chief Executive Mark Zuckerberg
would appear before members of the European Parliament to answer
questions about the improper use of users' data.*:nL5N1SN619
    3M Co  MMM.N , was the biggest drag on the Dow, slipping
-0.7 percent after Jefferies downgraded the stock to "hold."
    Advancing issues outnumbered declining ones on the NYSE by a
2.30-to-1 ratio; on the Nasdaq, a 2.62-to-1 ratio favored


 (Reporting by Stephen Culp; Editing by Steve Orlofsky)
 ((; 646-223-6076;))

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