US STOCKS-S&P 500 breaches 3,300 mark on strong Morgan Stanley earnings, retail data

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* Morgan Stanley jumps on raised targets, earnings

* Chipmakers rise after TSMC's strong outlook

* Dec. retail sales rise in-line with estimate

* Indexes up: Dow 0.57%, S&P 0.56%, Nasdaq 0.64%

(Updates to early afternoon)

By Sruthi Shankar

Jan 16 (Reuters) - The S&P 500 crossed the 3,300 mark for

the first time and the other main indexes hit record highs on

Thursday, as encouraging retail sales data and upbeat Morgan

Stanley earnings added to optimism from the signing of an

initial U.S.-China trade deal.

The Wall Street bank MS.N jumped 8% to the top of the S&P

500 after it beat quarterly profit estimates and raised its

performance goals, closing out big U.S. lenders' earnings on a

strong note. Sentiment was further lifted by data that showed U.S. retail

sales rose 0.3% in December, in-line with economists' estimates.

The numbers indicated the U.S. economy maintained a moderate

growth pace at the end of 2019 and eased concerns about the

health of the sector following disappointing holiday sales

reports from Target Corp TGT.N and J.C. Penney Co Inc JCP.N .

"The consumer needs to be strong and evidence of that is

retail sales, which came in pretty well after some slowing over

the last several months," said Tom Martin, portfolio manager at

Globalt in Atlanta.

Technology stocks .SPLRCT , which have fueled the recent

rally, provided the biggest support. Microsoft Corp MSFT.O

rose 1.1% and chipmakers gained after a strong forecast from the

world's top contract chipmaker TSMC 2330.TW TSM.N .

Stock markets hit new highs after Washington and Beijing on

Wednesday signed a deal that paused an 18-month long tariff war

that had bruised financial markets and crimped global growth.

China is expected to boost purchases of U.S. goods and

services in exchange for the rolling back of some tariffs as

part of the deal, but several thorny issues remain unresolved.

"We're in that environment where investors say - we've got

low yields and a potentially re-accelerating economy and an

earnings growth that is looking to be somewhere between 5% and

9%," said Martin.

Analysts expect profits at S&P 500 companies to have dropped

0.4% in the fourth quarter, but full-year 2020 earnings are

estimated to grow 9.6%, according to Refinitiv IBES data.

At 1:05 p.m. ET, the Dow Jones Industrial Average .DJI

rose 0.57% to 29,195.01.

The S&P 500 .SPX gained 0.56% to 3,307.74 and the Nasdaq

Composite .IXIC was up 0.64% at 9,318.25.

Among other stocks, Signet Jewelers Ltd SIG.N soared 42.6%

after raising 2020 adjusted earnings estimate.

Bank of New York Mellon Corp BK.N slid 7.8% to the bottom

of the S&P 500 after the custodian bank missed profit estimates.

Advancing issues outnumbered decliners by a 2.76-to-1 ratio

on the NYSE and a 2.75-to-1 ratio on the Nasdaq.

The S&P index recorded 86 new 52-week highs and no new low,

while the Nasdaq recorded 177 new highs and four new lows.