* Target shares slump as holiday sales miss
* UnitedHealth rises after backing full-year forecast
* Indexes: Dow +0.54%, S&P 500 +0.33%, Nasdaq +0.32% (Updates with afternoon trade)
By Noel Randewich
Jan 15 (Reuters) - U.S. stocks climbed but were off earlier intraday records on Wednesday after the United States and China signed a Phase 1 trade agreement and pledged to resolve a tariff dispute that has roiled financial markets for over a year.
The centerpiece of the truce is a pledge by China to purchase at least an additional $200 billion worth of U.S. farm products and other goods and services over two years, over a baseline of $186 billion in purchases in 2017.
The trade agreement clears the way for investors to focus on upcoming quarterly earnings reports, including the outlooks companies provide in light of the deal.
“There’s no question from a psychological viewpoint it’s a big relief for the market,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “There are still CEOs that are dubious, but this might help capital investments, and that was the biggest missing link to the economy over the last few years.”
Trump said he would remove all U.S. tariffs on Chinese imports as soon as the two countries complete the Phase 2 trade agreement, on which negotiations will start soon.
The three main stock indexes gave up early record highs, with disappointing earnings reports from Bank of America pushing the S&P financial index down 0.6%.
Bank of America Corp reported a better-than-expected quarterly profit, but warned of weak net interest income in the first half of 2020, knocking its shares down 2.1%.
Goldman Sachs Group Inc added 0.5% despite reporting a bigger-than-expected fall in profit as it set aside more money to cover legal costs.
At 2:27 pm ET, the Dow Jones Industrial Average was up 0.54% at 29,095.54 points, while the S&P 500 gained 0.33% to 3,293.84.
The Nasdaq Composite added 0.32% to 9,280.96.
UnitedHealth Group Inc, the largest U.S. health insurer, rose 3.5% as it affirmed its full-year outlook for 2020 adjusted earnings. The S&P healthcare index climbed 1.0%.
Retailer Target Corp slumped 7.3% after it missed its own expectations for 2019 holiday season sales after reporting a drop in online growth and demand for toys and electronics.
Toymakers Mattel Inc and Hasbro Inc fell 4.8% and 2.6%, respectively, while electronics seller Best Buy dropped 1.4%.
Advancing issues outnumbered declining ones on the NYSE by a 1.46-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored advancers.
The S&P 500 posted 72 new 52-week highs and no new lows; the Nasdaq Composite recorded 143 new highs and 15 new lows. (Additional reporting by Sruthi Shankar and Susan Mathew in Bengaluru; Editing by Bernadette Baum)