Wall Street boosted by technology and retail shares

NEW YORK (Reuters) - Wall Street rose on Tuesday, buoyed by technology and retail shares after better-than-expected economic data and an upbeat forecast from electronics retailer Best Buy.

Markets overcame initial weakness, and the move up coincided with a further decline in the U.S. dollar. The broad S&P 500 index held above its 200-day moving average of around 1,115 after closing beyond that level on Monday for the first time since early August.

The S&P's move is a potentially bullish sign, but investors looked for improved volume and a decisive breakout to mount another leg up in the market.

Best Buy Co Inc jumped 7.2 percent to $37.15 after reporting higher quarterly profit and raising its outlook. The broader retail sector was boosted after data showed retail sales posted their largest gain in five months in August.

The Dow Jones retail index rose 1.1 percent. Among other gainers in the sector, J.C. Penney Co Inc gained 7.4 percent to $23.98.

"Jeans, T-shirts are big items, but computers and electronics in general have really overtaken back-to-school. And the big fear was the back to school (consumer) rolled up and died this year, and it doesn't look like that happened," said Kim Caughey, senior equity research analyst at Fort Pitt

Capital Group in Pittsburgh.

Adding to the positive tone was better-than-expected business inventory data. The two reports Tuesday built on data over the last two weeks that had eased worries the economy was sliding back into recession.

The Dow Jones industrial average gained 29.29 points, or 0.28 percent, to 10,573.42. The Standard & Poor's 500 Index added 3.50 points, or 0.31 percent, to 1,125.40. The Nasdaq Composite Index rose 9.78 points, or 0.43 percent, to 2,295.49.

Delta Air Lines Inc was up 6.8 percent at $11.40 after the carrier forecast higher unit revenue for the third quarter.

Chipmakers led the technology sector higher, with the semiconductor index up 2 percent.

(Editing by Jeffrey Benkoe)