US STOCKS-S&P 500 hits record high on rising rate cut hopes

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* U.S. 10-yr Treasury yields fall to lowest since Nov 2016
* Bank stocks drop as interest rate cut bets rise
* Symantec jumps on report Broadcom in deal talks
* Indexes up: Dow 0.19%, S&P 0.25%, Nasdaq 0.28%

(Updates to open)
By Shreyashi Sanyal
July 3 (Reuters) - The S&P 500 index hit a record high on
Wednesday, led by defensive sectors, as bets of an interest rate
cut rose on fears of a slowing global economy due to simmering
trade tensions.
The benchmark U.S. 10-year Treasury yields US10YT=RR
slipped to their lowest since November 2016, while euro zone
yields tumbled to record lows on bets the European Central
Bank's next chief would stay a dovish course.
The defensive utilities .SPLRCU , real estate .SPLRCT and
consumer staples .SPLRCS rose the most among the 11 major S&P
sectors as the falling bond yields made stocks that pay high
dividends more attractive.
"With the overhang of further tariffs on Chinese imports
paused and the chances of a rate cut from the Fed getting
higher, more investors are getting comfortable to invest bigger
in equities," said Shawn Gibson, chief investment officer at
asset management firm Liquid Strategies.
Traders bet for about a 25% chance the Federal Reserve would
cut borrowing costs by half a percentage point at its July 30-31
policy meeting, compared with 20% late on Monday. MMT/
Bets that the central bank would cut rates to preserve a
decade-long U.S. expansion helped the S&P 500 and the Dow Jones
indexes post their best June performance in decades.
The healthcare sector .SPXHC gained 0.38%, the biggest
boost to the S&P 500, helped by gains in Johnson & Johnson,
UnitedHealth Group Inc UNH.N and Merck & Co Inc MRK.N .
The financial sector .SPSY was flat, while bank stocks
.SPXBK , which tend to benefit from a higher interest rate
environment, fell 0.37%.
Trading volumes are expected to be thin due to shortened
trading hours on Wednesday ahead of the July Fourth holiday.
The Dow Jones Industrial Average .DJI rose 50.82 points,
or 0.19%, to 26,837.5 and the S&P 500 .SPX gained 7.38 points,
or 0.25%, to 2,980.39.
The Nasdaq Composite .IXIC added 22.90 points, or 0.28%,
to 8,131.99.
The ADP National Employment Report, often considered a
precursor to the Labor Department's more comprehensive monthly
non-farm payrolls data due on Friday, showed U.S. private
employers added 102,000 jobs in June, well below economists'
expectations. Another set of data showed the U.S. trade deficit jumped to
a five-month high in May as imports of goods increased and new
orders for U.S.-made goods fell for a second straight month May
while shipments barely rose. Among stocks, Symantec Corp SYMC.O surged 14.5%, the most
on the S&P, after sources told Reuters that chipmaker Broadcom
Inc AVGO.O is in advanced talks to buy the cybersecurity firm.
Broadcom fell 3.6%. Tesla Inc TSLA.O rose 6.4% after the electric carmaker set
a record for quarterly vehicle deliveries in a triumphant
response to months of questions about demand for its luxury
electric cars. Advancing issues outnumbered decliners by a 2.01-to-1 ratio
on the NYSE and by a 1.40-to-1 ratio on the Nasdaq.
The S&P index recorded 53 new 52-week highs and no new low,
while the Nasdaq recorded 59 new highs and 22 new lows.