US STOCKS-S&P 500, Dow gain as upbeat retail sales offset recession fears

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* U.S. 30-year yields hit record low
* U.S. retail sales, Walmart results beat expectations
* U.S.-China trade rhetoric intensifies
* Cisco tumbles following disappointing guidance
* Dow up 0.39%, S&P up 0.25%, Nasdaq off 0.09%

(Updates to market close)
By Stephen Culp
NEW YORK, Aug 15 (Reuters) - The S&P 500 and the Dow gained
ground in a late rally on Thursday as upbeat retail sales data
offset recessionary fears amid the simmering U.S.-China trade
tensions.
Wall Street zig-zagged from red to black and back much of
the day as investors juggled mixed messages of a strong consumer
and dropping U.S. Treasury yields.
The Nasdaq closed lower, weighed by a plunge in the shares
of Cisco Systems Inc CSCO.O .
"You've an environment where we're digesting the move down
in interest rates and the yield curve yesterday," said Darrell
Cronk, chief investment officer for Wells Fargo Wealth and
Investment Management in New York. "Volume is lighter today.
You're not getting outsized movements one way or the other."
Walmart Inc WMT.N beat second-quarter analyst estimates
and raised its full-year earnings outlook, sending shares of the
world's largest retailer up 6.1% and soothing concerns about
waning consumer demand. Those concerns were further eased when retail sales data
surpassed analyst expectations. Consumers, who account for about
70% of the U.S. economy, stepped up their spending across the
board in July, according to the Commerce Department.
"One thing the market took solace in today is better U.S.
economic data," Cronk added. "That helped to calm some of the
fears from yesterday."
Other economic data was less sanguine. Manufacturing output
shrank more than expected in July, according to the U.S. Federal
Reserve, and new claims for unemployment benefits came in above
economist forecasts. Belligerent rhetoric kept U.S.-China trade tensions at a low
boil, as China vowed it would counter the last round of tariffs
on Chinese imports and called on the United States to meet it
halfway, while U.S. President Donald Trump said in an interview
any deal must be made "on our terms." The prolonged escalation of the trade war between the
world's two largest economies and the economic fallout have
vexed global markets for months and have begun to drag on some
companies' top lines.
Impending U.S. tariffs weighed on Cisco Systems, which
plunged 8.6% after reporting a 25% drop in China sales and set
sales and revenue forecasts well below analyst estimates.

Trade tensions also sent the U.S. 30-year Treasury yield to
a record low and the benchmark 10-year yield to a three-year
trough. The Dow Jones Industrial Average .DJI rose 99.97 points,
or 0.39%, to 25,579.39, the S&P 500 .SPX gained 7 points, or
0.25%, to 2,847.6, and the Nasdaq Composite .IXIC dropped 7.32
points, or 0.09%, to 7,766.62.
Of the 11 major sectors of the S&P 500, six closed the day
in positive territory, with consumer staples .SPLRCS enjoying
the largest percentage gain.
Shares of JC Penney Co Inc JCP.N surged 2.2% after the
struggling department store operator posted a smaller quarterly
loss than analysts estimated. General Electric Co shares dropped 11.3% on the heels of a
report from whistleblower Harry Markopolos accusing the
conglomerate of hiding $38.1 billion in potential losses and
claiming its cash situation was far worse than disclosed.
Advancing issues outnumbered declining ones on the NYSE by a
1.08-to-1 ratio; on Nasdaq, a 1.37-to-1 ratio favored decliners.
The S&P 500 posted 14 new 52-week highs and 59 new lows; the
Nasdaq Composite recorded 23 new highs and 282 new lows.
Volume on U.S. exchanges was 7.72 billion shares, compared
with the 7.53 billion average over the last 20 trading days.