September 4, 2019 / 2:45 PM / 3 months ago

US STOCKS-Wall St rises as strong Chinese data eases growth worries

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* Ten of 11 major S&P 500 sectors trading higher

* China service sector activity rises to 3-mth high

* Activision Blizzard rises on BMO upgrade

* Tyson Foods falls on cutting FY profit forecast

* Indexes up: Dow 0.57%, S&P 0.58%, Nasdaq 0.72% (Updates to open)

By Uday Sampath Kumar

Sept 4 (Reuters) - U.S. stocks rose on Wednesday as upbeat data from China's services sector eased concerns about a global economic slowdown, while Hong Kong's withdrawal of a controversial bill supported sentiment.

Activity in China's services sector expanded at the fastest pace in three months in August, providing a boost to the world's second-largest economy that has been struggling to reverse a prolonged slump in its manufacturing sector.

Sentiment also got a lift after Hong Kong leader Carrie Lam withdrew an extradition bill that had triggered months of often violent protests in the Chinese-ruled city.

The three main indexes had come under pressure on Tuesday after the United States and China imposed new tariffs on each other's goods and data showed a contraction in U.S. factory activity in August.

"The positive economic news out of China is offsetting the weak manufacturing data from the U.S. yesterday and diminishes the fear of an economic downturn," said Shawn Gibson, chief investment officer at asset management firm Liquid Strategies.

"Global growth and not just U.S. growth is a very important narrative for investors because a strong Chinese economy is important to our economy as well," Gibson added.

Markets struggled last month as escalating trade tensions and the inversion of a key part of the U.S. yield curve, often seen as a sign of recession, drove investors away from risky assets and pushed the S&P 500 to log its worst August in four years.

Further easing concerns of a slowdown were comments from New York Federal Reserve President John Williams who said he is ready to "act as appropriate" to help the United States avoid an economic downturn but so far the economy appeared to be in a good place.

Ten of the 11 major S&P sectors were higher, with a 1.05% rise in technology stocks providing the biggest boost.

Trade-sensitive chipmakers accounted for a major portion of those gains, with the Philadelphia Semiconductor index up 2.18%.

Bank stocks rose 2.18%, bouncing back from a selloff on Tuesday when the 10-year U.S. Treasury yield hit its lowest since July 2016.

UBS slashed its forecasts for global growth and government bond yields, predicting 10-year U.S. yield, the benchmark for global borrowing costs, would end the year at just 1%.

Gibson said the nonfarm payrolls report due Friday will be very critical, because any sort of weakness in data could push Treasury yields even lower and signal that bond investors are concerned about an upcoming recession.

At 10:17 a.m. ET the Dow Jones Industrial Average was up 148.56 points, or 0.57%, at 26,266.58, the S&P 500 was up 16.88 points, or 0.58%, at 2,923.15 and the Nasdaq Composite was up 57.02 points, or 0.72%, at 7,931.18.

Tyson Foods Inc shares fell 5.2% to the bottom of the S&P 500 after the United States' biggest meat processor cut its 2019 earnings forecast.

PVH Corp jumped 3% as the Calvin Klein-owner's chief executive officer, Emanuel Chirico, on Tuesday announced plans to buy company shares.

Data showed the U.S. trade deficit narrowed slightly in July as exports rebounded, but the gap with China surged to a six-month high.

Advancing issues outnumbered decliners by a 4.17-to-1 ratio on the NYSE and by a 2.47-to-1 ratio on the Nasdaq.

The S&P index recorded 52 new 52-week highs and one new low, while the Nasdaq recorded 44 new highs and 38 new lows. (Reporting by Uday Sampath and Shreyashi Sanyal in Bengaluru; Editing by Anil D'Silva)

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