US STOCKS-Wall Street rises modestly on Walmart bump

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* Walmart beats holiday qtr estimates, lifts Dow

* U.S.-China trade talks resume in Washington

* Stocks pare gains after Reuters interview NYFed's Williams

* Indexes up: Dow 0.03 pct, S&P 0.15 pct, Nasdaq 0.19 pct (Adds information on 52 week highs)

By Stephen Culp

NEW YORK, Feb 19 (Reuters) - U.S. stocks gained ground onTuesday as upbeat results from Walmart boosted investorsentiment and high-level U.S.-China trade talks resumed inWashington.

All three major U.S. equity indexes closed higher, with theNasdaq ending its seventh consecutive day in the black.

Stocks have recovered broadly from their year-end selloff,with the Nasdaq .IXIC up almost 21 percent from its Dec. 24low and the S&P 500 .SPX more than 18 percent. More stocks aremaking 52-week highs than at any time since Wall Street wastaking those indexes to records in August and September.

Stocks pared their gains late in the session, however, aftera Reuters story quoted New York Fed President John Williamssaying a different economic outlook would be necessary for theU.S. Federal Reserve to resume its interest rate hikes.*:nL1N20E1DU

"(Williams) did say (the Fed was) going to be drawing downthe balance sheet for some time," said Tim Ghriskey, chiefinvestment strategist at Inverness Counsel in New York. "Perhapsthat caused some concern in the markets."

Consumer discretionary stocks, led by Amazon.comAMZN.O ,provided the biggest lift to the S&P 500 and Nasdaq, whileWalmart Inc WMT.N headed up the blue-chip Dow's advance.

Walmart reported a better-than-expected jump in same-storesales during the holiday quarter*:nL1N20E0A2, sending shares ofthe world's largest retailer up 2.2 percent.

"Walmart is the big story today," said senior marketstrategist for Allianz Investment Management in Minneapolis."You take a look at what we had last week withweaker-than-expected retail sales, and now Walmart's coming insaying they had the best Christmas season in some time.

"It provides reassurance to the market."

A fresh round of high-level trade talks between the UnitedStates and China began in Washington, with U.S. Chamber ofCommerce vice president Myron Brilliant expressing hope that"the two sides will reach a comprehensive, bold and significanttrade agreement."*:nL1N20E02U

On Wednesday, the Federal Open Market Committee (FOMC) isslated to release minutes from its January policymaking meeting.The minutes are expected to reaffirm the central bank'sstatement last month that it would be "patient" with respect tofurther rate hikes after markets swooned late in December onfears of an economic slowdown.

Indeed, in the quarters ahead, analysts see a slowdown incorporate profit growth. While fourth-quarter profits areexpected to have increased by 16.3 percent, the outlook goingforward grows cloudier.

First-quarter 2019 earnings are now seen dropping by 0.6percent from last year, which would mark the first annualdecline since the earnings recession that ended mid-2016.

The Dow Jones Industrial Average .DJI rose 8.07 points, or0.03 percent, to 25,891.32, the S&P 500 .SPX gained 4.16points, or 0.15 percent, to 2,779.76 and the Nasdaq Composite .IXIC added 14.36 points, or 0.19 percent, to 7,486.77.

Of the 11 major sectors in the S&P 500, all but healthcare .SPXHC and industrials .SPLRCR closed in positive territory.

Amazon ended the session up 1.2 percent, bouncing back froma two-day sell-off following news that the e-commerce giant'sChina unit is in merger talks with Chinese shopping site Kaola.*:nL3N20E427

Shares of Freeport McMoRanFCX.N jumped 6.6 percent afterCitigroup raised the stock to "buy" from "neutral."*:nL3N20E4CB

Advancing issues outnumbered declining ones on the NYSE by a2.14-to-1 ratio; on Nasdaq, a 1.63-to-1 ratio favored advancers.

Between the New York Stock Exchange and Nasdaq, 287 stockshit 52-week highs, the most since September 21.

The S&P 500 posted 42 new 52-week highs and no new lows; theNasdaq Composite recorded 97 new highs and 20 new lows.

Volume on U.S. exchanges was 6.89 billion shares, comparedto the 7.37 billion average over the last 20 trading days. (Reporting by Stephen CulpEditing by Tom Brown) ((; 646-223-6076;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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