by Stephen Culp

NEW YORK (Reuters) – The New York Stock Exchange closed higher on Tuesday, with the Dow Jones Industrial Average closing at a record high as the release of a monthly U.S. retail sales report failed to dampen hopes that the Fed will cut interest rates in September.

The Dow Jones index gained 1.9%, or 742.76 points, to 40,954.48 points.

The broader S&P 500 gained 35.98 points, or 0.6%, to 5,667.20.

The Nasdaq Composite rose 36,774 points, or 0.2%, to 18,509.34 points.

The U.S. Commerce Department said retail sales were unchanged in June, easing concerns that the Federal Reserve’s tight policy was tipping the U.S. economy into recession.

“When you look at the economic data, you see a slowdown, but not at a worrisome pace,” said Tom Hainlin, chief investment strategist at US Bank Wealth Management in Minneapolis.

“The Fed is seeing exactly what it wanted to see: the economy is slowing, but not too much and not too fast.”

In stocks, UnitedHealth jumped after reporting better-than-expected second-quarter profit.

Match was also on the rise, with activist investor Starboard putting pressure on Tinder’s parent company after increasing its stake in the group to more than 6.5%, according to the Wall Street Journal.

Bank of America also rose after reporting better-than-expected profit.

Morgan Stanley, for its part, declined due to wealth management revenues falling short of analysts’ expectations.

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(with Lisa Mattackal and Ankika Biswas; Camille Raynaud)

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