US STOCKS-Wall St gains on easing producer prices, Target's upbeat forecast

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US retail sales fall slightly in October

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Target jumps on upbeat quarterly profit forecast

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Indexes up: Dow 0.23%, S&P 0.24%, Nasdaq 0.26%

(Updated at 10:02 a.m. ET/1502 GMT)

By Sruthi Shankar and Amruta Khandekar

Nov 15 (Reuters) - U.S. stock indexes edged higher on Wednesday, following big gains in the prior session, as cooling producer prices supported views that the Federal Reserve has finished raising interest rates, while Target shares surged following an upbeat holiday-quarter forecast.

Target advanced 17.6% as the big-box retailer forecast fourth-quarter profit largely above Wall Street expectations on easing supply-chain costs.

The bright outlook also lifted shares of other retailers, while the S&P 500 consumer staples index, which houses Target, jumped 0.7%.

Data on Wednesday showed

retail sales

fell less than expected in October, slipping 0.1% against forecasts of a 0.3% fall per economists polled by Reuters.

U.S. producer prices eased more than expected amid a sharp drop in gasoline costs, providing further evidence that inflation was trending lower.

"Given the strong consumer – which isn't surprising given the employment picture – it is only reasonable to assume that corporate profits will continue to grow and this should only add fuel to the fire for the year-end rally," noted Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

"Inflation for now is coming back down and the economy for now continues to grow at a robust pace, so the only logical direction for stocks is higher."

The benchmark S&P 500 and the tech-heavy Nasdaq posted their biggest daily percentage gain in more than six months on Tuesday as softer-than-expected consumer prices data raised hopes that U.S. interest rates have peaked.

Money market traders have fully priced in the odds that the U.S. central bank will keep rates steady in December, as per CME Group's Fedwatch tool. They also see the first rate cut of the cycle to kick off in May 2024.

Focus will also be on meeting between U.S. President Joe Biden and Chinese leader Xi Jinping for the first time in a year on Wednesday, for talks that may ease friction between the adversarial superpowers on military conflicts, drug-trafficking and artificial intelligence.

At 10:02 a.m. ET, the Dow Jones Industrial Average was up 80.18 points, or 0.23%, at 34,907.88, the S&P 500 was up 10.63 points, or 0.24%, at 4,506.33, and the Nasdaq Composite was up 36.87 points, or 0.26%, at 14,131.25.

Further aiding the mood, the U.S. House of Representatives passed a temporary spending bill that would avert a government shutdown, with broad support from lawmakers in both parties.

To prevent a shutdown, the Senate and Republican-controlled House must enact a legislation that Biden can sign into a law before current funding for federal agencies expires at midnight on Friday.

Among other stocks, TJX fell 3.9% as the off-price apparel chain cut its fourth-quarter profit forecast.

U.S.-listed shares of Chinese ecommerce firm JD.com climbed 6.8% after the company posted a surge in profit. Walt Disney shares gained 2.7% on a report stating activist investor ValueAct Capital has taken a stake in the company.

Sirius XM surged 8.1% as Warren Buffett's Berkshire Hathaway took a stake in the audio entertainment company.

Advancing issues outnumbered decliners by a 2.05-to-1 ratio on the NYSE and by a 2.13-to-1 ratio on the Nasdaq.

The S&P index recorded 35 new 52-week highs and no new low, while the Nasdaq recorded 70 new highs and 32 new lows. (Reporting by Sruthi Shankar and Amruta Khandekar in Bengaluru; Editing by Shinjini Ganguli and Maju Samuel)