US STOCKS-Wall St gains as investors buy on dips
* Retail stocks mostly up, but industrials sector slips
* Concerns remain over China, Italy's political stalemate
* Dow up 0.2 pct, S&P 500 up 0.4 pct, Nasdaq up 0.3 pct
NEW YORK, March 4 (Reuters) - U.S. stocks rose modestly on Monday as investors kept up a recent trend of buying on dips, with equities recovering from early weakness despite concerns about growth and China's housing market.
The S&P 500 has jumped about 7 percent so far in 2013, resisting calls for a pullback even though there are few catalysts to drive shares definitively higher. The Dow is less than 1 percent away from hitting its lifetime closing high, while the S&P 500 is 3 percent below its record close.
Concerns about "automatic" budget cuts in the United States and the euro-zone debt crisis also have served as reasons for investors to take a breather in the face of technical resistance. Any sign that the $85 billion in cuts are beginning to take a toll on the economy could jostle markets.
"The stock market still represents opportunity for investors, especially when you look at the domestic market, but it wouldn't be surprising if we pulled back on the concerns over China and Europe," said Eric Teal, chief investment officer at First Citizens Bancshares in Raleigh, North Carolina, which manages $5 billion.
The Dow Jones industrial average was up 33.44 points, or 0.24 percent, at 14,123.10. The Standard & Poor's 500 Index was up 5.68 points, or 0.37 percent, at 1,523.88. The Nasdaq Composite Index was up 10.75 points, or 0.34 percent, at 3,180.49.
Retail stocks ranked among the strongest after Deutsche Bank raised price targets on Target Corp and Macy's Inc . Target climbed 3.6 percent to $66.46. Macy's shares rose 2.4 percent to $41.65.
The S&P retail index jumped 1.3 percent.
Bucking the trend was J.C. Penney Co, which is struggling to compete against its rivals, falling 4.6 percent to $16.87.
Plans to tighten curbs on the housing market in China and a slowdown in the growth of that country's services sector prompted worries about growth in the world's second-largest economy. In addition, China's services industries expanded at the slowest pace in five months in February.
Among S&P 500 sectors, the industrial sector index was down 0.2 percent.
Caterpillar Inc shares slid 1.9 percent to $89.65, weighing the most on the Dow average. Alcoa Inc shares lost 1.3 percent to $8.33.
Also weighing on the market, Italy could be inching closer toward another election within months after center-left leader Pier Luigi Bersani issued an ultimatum to anti-establishment 5-Star Movement boss Beppe Grillo to support a new government or return to the polls.
Providing some support for the market, Janet Yellen, the Federal Reserve's influential vice chairwoman, said the central bank's aggressive monetary stimulus is warranted, given how far below its full potential the economy is operating.
Hess Corp shares rose 4.1 percent to $69.28 after the company said it will exit its retail, energy marketing, and energy trading businesses. The company also boosted its dividend by 150 percent and announced a stock buyback program.
Ferro Corp shares surged 31.2 percent to $6.82 after A. Schulman Inc offered to buy the company for $563 million, although Ferro rejected the bid.