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* Walmart (NYSE:WMT) gains after Q2 comp sales beat
* Cisco tumbles after forecast disappoints
* U.S. retail sales surge in July in boost to economy
* Indexes up: Dow 0.44%, S&P 0.42%, Nasdaq 0.17%
(Updates prices to early afternoon)
By Amy Caren Daniel
Aug 15 (Reuters) - U.S. stocks tried to bounce back on
Thursday from a steep selloff a day earlier, as strong retails
sales data and upbeat Walmart earnings eased concerns of a
recession, but mixed signals on trade and Cisco's dismal
forecast capped gains.
Recession fears have gripped the market after the U.S.
Treasury yield curve inverted for the first time in 12 years on
Wednesday on growing worries about the impact of a bruising
trade war on global growth.
However, a Commerce Department report showed a much
better-than-expected rise in July retail sales as consumers
bought a range of goods even as they cut back on motor vehicle
purchases. "Data still indicates that the consumer is in a relatively
good shape, it points to the fact that even with an inverted
yield curve that we saw yesterday, a recession is not coming so
fast," said Paul Nolte, portfolio manager at Kingsview Asset
Management in Chicago.
"The trade news is not linear. It's very hard to guess what
the next step is going to be and it's impacting companies like
Cisco, so the longer the trade issue lingers, the harder it is
going be for companies to show top- and bottom-line growth."
Cisco Systems Inc CSCO.O dropped 7% and was the biggest
drag on all three major indexes, after the Dow component blamed
the bruising U.S.-China trade war for poor quarterly forecasts.
China's finance ministry said earlier in the day that it
would retaliate to the latest U.S. tariffs, spooking markets
initially.
However, a spokeswoman for the ministry later said, "We hope
the U.S. will meet China halfway, and implement the consensus of
the two heads of the two countries in Osaka." Walmart Inc WMT.N shares rose 4.3% after the retailer
reported second-quarter U.S. comparable sales that beat
estimates and boosted its earnings forecast for the year.
The company's strong report lifted the consumer staples
sector .SPLRCS up 1.5%, which gave the biggest boost to the
market.
At 12:14 p.m. ET, the Dow Jones Industrial Average .DJI
was up 112.05 points, or 0.44%, at 25,591.47, the S&P 500 .SPX
was up 11.95 points, or 0.42%, at 2,852.55. The Nasdaq Composite
.IXIC was up 13.38 points, or 0.17%, at 7,787.31.
The benchmark S&P 500 .SPX is about 6% away from an
all-time high hit in July.
General Electric (NYSE:GE) GE.N plunged as much as 15.3%, and was on
pace to post its biggest one-day drop in a decade, after a
whistleblower in the Bernard Madoff Ponzi scheme case alleged
that company financial filings masked the depths of its
problems. Advancing issues outnumbered decliners by a 1.48-to-1 ratio
on the NYSE and by a 1.05-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and 47 new
lows, while the Nasdaq recorded 15 new highs and 204 new lows.