* Russell 2000 ends up after near correction territory early
* J.C. Penney, Nordstrom soar a day after results
* Dow up 0.3 pct; S&P 500 up 0.4 pct; Nasdaq up 0.5 pct (Updates to close)
By Caroline Valetkevitch
NEW YORK, May 16 (Reuters) - U.S. stocks ended higher on Friday in a late-day rebound as small-cap names edged up after recent weakness and consumer discretionary shares advanced.
The Russell 2000 gained 0.6 percent, recovering after once again approaching correction territory, defined as a 10 percent drop from a recent high, earlier in the session.
The week has been marked by small-cap weakness, with the Russell index down 0.4 percent for the week. The Dow and the S&P 500 also slipped for the week, while the Nasdaq rose.
“The market’s held in, and I think technically there’s a sense it didn’t break down. People came in expecting it was going to be another day like yesterday and the fact (is) it didn’t turn out like that at all,” said Ken Polcari, director of the NYSE floor division at O‘Neil Securities in New York.
The S&P 500 climbed back above its 50-day moving average near 1,868, an area that has served as support.
Telecom and consumer discretionary sectors led the S&P 500 higher. Shares of Verizon Communications climbed 2.3 percent to $49.07 a day after a regulatory filing showed Warren Buffett’s Berkshire Hathaway bought 11 million shares of Verizon in the first quarter.
The Dow Jones industrial average rose 44.50 points or 0.27 percent, to end at 16,491.31. The S&P 500 gained 7.01 points or 0.37 percent, to 1,877.86. The Nasdaq Composite added 21.30 points or 0.52 percent, to 4,090.59.
In earnings news, J.C. Penney Co and Nordstrom Inc both jumped a day after posting earnings that exceeded forecasts. Nordstrom, up 14.7 percent at $70.55, was the S&P 500’s biggest percentage gainer. J.C. Penney shot up 16.2 percent to $9.73. The S&P consumer discretionary index advanced 0.7 percent.
Positioning before options expiration could have added to the late-day bounce, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles
For the week, the Dow fell 0.6 percent, the S&P 500 dipped 0.03 percent and the Nasdaq gained 0.5 percent.
Both the Dow and the S&P 500 hit record highs earlier this week. The benchmark S&P 500 is up 1.6 percent for the year.
At the same time, the Russell 2000 remained below its 200-day moving average, a sign of weak momentum. Investors have worried that small-caps’ prolonged weakness could be a precursor to broader losses.
Among other upbeat earnings, shares of Applied Materials jumped 8.1 percent to $20.21 a day after the chip gear maker reported revenue that slightly exceeded expectations. Autodesk Inc raised its full-year revenue view, sending its stock up 8.1 percent to $51.67.
Economic data added to the positive tone. Housing starts jumping 13.2 percent in April while building permits hit their highest in nearly six years. The PHLX housing sector index gained 0.8 percent.
About 5.7 billion shares changed hands on U.S. exchanges, below the 6.1 billion average for the month so far, according to data from BATS Global Markets.
Reporting by Caroline Valetkevitch; Additional reporting by Herb Lash; Editing by Jan Paschal