Indexes recover in cautious trade amid global tensions

By Sinead Carew

(Reuters) - U.S. shares were up slightly in afternoon trading, driven by a rise in the S&P energy sector as oil prices rose, as investors focussed on global politics after Turkey shot down a Russian warplane near the Syrian border.

The three major indexes recovered from a morning selloff that was triggered by the overseas news despite strong U.S. economic data.

Oil prices were up more than 2 percent after a spike in Middle East tensions.

"You came in this morning and everybody was talking about this potential escalation of violence between Turkey and Russia," said Andrew Frankel, co-president of Stuart Frankel & Co in New York, adding that investors settled down after Russia did not appear to respond with immediate action.

"Russia's response could have been a lot more confrontational," he said.

Trading volume also appeared relatively light ahead of Thursday's U.S. Thanksgiving holiday, when markets will be closed. Light volume tends to exaggerate market swings, Frankel said.

The Dow Jones industrial average rose 57.02 points, or 0.32 percent, to 17,849.7, the S&P 500 gained 6.59 points, or 0.32 percent, to 2,093.18 and the Nasdaq Composite added 5.02 points, or 0.1 percent, to 5,107.50.

Travel-related stocks fell after the U.S. State Department issued a global travel alert for Americans. The Dow Jones Airlines index <.DJUSAR> index was down 2.7 percent, led by a 5-percent decline in Allegiant Travel . United Continental and Delta Air Lines both fell around 3 percent.

Shares of travel website operators Priceline and TripAdvisor fell more than 2 percent and cruise operators Carnival Corp and Royal Caribbean dropped by almost 2 and 3 percent respectively.

The U.S. economy grew at a 2.1 percent pace in the third-quarter, compared with an earlier estimate of 1.5 percent, data showed, but consumer sentiment in November was the weakest since September 2014 ahead of the crucial holiday shopping season.

Seven of the 10 major S&P sectors were flat to up slightly, with energy <.SPNY> leading the pack with a 2.4-percent increase, followed by a 1-percent increase in materials <.SPLRCM>.

Tiffany's shares were up 3.9 percent at $79.59, recovering from a 2-percent loss. The upscale jeweler reported a surprise drop in quarterly sales and forecast a bigger fall in full-year profit than expected. But it gave a higher free cash flow forecast and accelerated share buybacks.

Campbell Soup was up 3 percent after the world's biggest soup maker reported a better-than-expected quarterly profit and raised its full-year profit forecast.

Hewlett-Packard will release its last quarterly results as a single company after the close.

Advancing issues outnumbered declining ones on the NYSE by 1,922 to 1,115, for a 1.72-to-1 ratio on the upside; on the Nasdaq, 1,645 issues rose and 1,148 fell for a 1.43-to-1 ratio favouring advancers.

The S&P 500 posted 9 new 52-week highs and 8 new lows; the Nasdaq recorded 54 new highs and 69 new lows.

(Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by Ted Kerr and Nick Zieminski)