US STOCKS-Wall St steadies after sell-off, but gains muted

* Trump says U.S. doing well in trade talks with China
* Dollar General jumps after Q1 profit beat
* Dow up 0.17%, S&P 500 up 0.21%, Nasdaq up 0.27%

(Updates to mid-afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, May 30 (Reuters) - U.S. stocks showed signs of
stabilizing on Thursday, but gains were kept in check by
conflicting comments on trade talks from President Donald Trump
and Beijing that reinforced concerns about a potentially lengthy
battle harming global growth.
Trump said talks with China were going well but those
comments were countered by a senior Chinese diplomat who said
provoking trade disputes is "naked economic terrorism."
The lack of clarity around the trade battle has rattled
investors of late, after the S&P 500 had risen more than 17%
through the first four months of the year on optimism a trade
deal between the two countries could be reached.
That optimism has faded, however, as the escalating dispute
between the two countries has weighed heavily on Wall Street in
May, with each of the three main indexes declining at least 5%
for the month. Thursday's gains marked the first advance for
major U.S. indexes this week.
"After multiple days of down, down, down the market usually
takes a collective breath for some stability and a re-evaluation
of risk," said Ben Phillips, chief investment officer at
Eventshares in Newport Beach, California.
"The market is coming to the realization that we are not
getting really clean or clear information and it is going to be
a lot of noise and just prepare for that."
A government report on Thursday showed U.S. inflation was
much weaker than initially thought in the first quarter on a
sharp slowdown in domestic demand, while growth was also
slightly lower than estimated in April. The Dow Jones Industrial Average .DJI rose 43.47 points,
or 0.17%, to 25,169.88, the S&P 500 .SPX gained 5.85 points,
or 0.21%, to 2,788.87 and the Nasdaq Composite .IXIC added
20.41 points, or 0.27%, to 7,567.72.
Trade jitters helped sustain demand for safe haven debt, as
U.S. Treasury yields held near 20-month lows. The yield curve
between three-month bills and 10-year notes remained inverted,
the inversion the widest in nearly 12 years. That, in turn, weighed on interest-rate sensitive bank
stocks .SPXBK , which dropped 1.2% and were on track for a
third straight day of declines, while the broader financial
sector .SPSY declined 0.5%.
The energy sector .SPNY fell 1.2%, as oil prices settled
down nearly 4% in part due to a smaller-than-expected decline in
U.S. crude inventories. The sector has fallen more than 10% this
month. Among stocks, Dollar General Corp DG.N jumped 7.2% after
the discount retailer's same-store sales and profit topped
expectations.
PVH Corp PVH.N plunged 14.9% as the worst performer on the
S&P 500, after the Calvin Klein owner cut its annual profit
forecast as it grapples with tariffs and slowing retail growth.

Declining issues outnumbered advancing ones on the NYSE by a
1.11-to-1 ratio; on the Nasdaq, a 1.38-to-1 ratio favored
decliners.
The S&P 500 had one new 52-week high and 25 new lows; the
Nasdaq Composite 25 new highs and 119 new lows.
About 6.25 billion shares changed hands in U.S. exchanges,
compared with the 6.99 billion daily average over the last 20
sessions.