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By Johann M Cherian and Sukriti Gupta

Jan 16 (Reuters) - Wall Street's main indexes took a pause on Thursday following strong gains in the previous session, helped by a batch of bumper earnings from major banks, while investors assessed data to gauge the outlook for interest rate cuts this year.

Morgan Stanley MS.N added 1.6% after the lender said earnings increased , fueled by a wave of dealmaking in the fourth quarter, while Bank of America BAC.N gave up early gains and was last down 0.2% in choppy trading. The country's second-largest bank predicted higher interest income in 2025.

"A lighter regulatory touch would usher in the ability to raise dividends and to do buybacks for some of the big money setter banks," said Art Hogan, chief market strategist at B Riley Wealth.

However, "some of that positive news was pulled forward yesterday, so you leave little room for more upside (in shares)," Hogan added.

In the previous session, Wall Street's main indexes logged their biggest one-day jump since Nov. 6 after data indicated that underlying inflation was subsiding and three of the country's biggest banks reported bumper results.

The S&P 500 banks index .SPXBK and the regional banks index .KBW have outperformed Wall Street's top indexes so far in January, as investors anticipate a favorable business environment for the sector under President-elect Donald Trump. The sentiment was reiterated by bank CEOs on Wednesday.

Of the 28 companies in the S&P 500 that have reported fourth-quarter earnings as of Wednesday, 82.1% have surpassed estimates, according to data compiled by LSEG.

At 9:54 a.m. ET, the Dow Jones Industrial Average .DJI fell 68.82 points, or 0.16%, to 43,152.73, the S&P 500 .SPX lost 1.49 points, or 0.03%, to 5,948.42 and the Nasdaq Composite .IXIC lost 12.88 points, or 0.07%, to 19,498.35.

Six of the 11 S&P 500 sectors rose, led by utilities' .SPLRCU 0.7% rise, while consumer discretionary stocks .SPLRCD lost 0.6%.

Weighing on the blue-chip Dow was UnitedHealth UNH.N that lost 2.8% after the insurer reported fourth-quarter revenue below estimates.

Economic data on Thursday was mixed with a report showing retail sales increased 0.4% in December, below a 0.6% rise economists polled by Reuters had expected, while another report showed the number of jobless claims rose more than expected in the week ended Jan. 11.

The yield on the benchmark 10-year Treasury note US10YT=RR has eased from its 14-month high and was last at 4.655%.

Traders now see the Federal Reserve cutting interest rates by 25 basis points by September, according to data compiled by LSEG. They had all but priced out any reductions for 2025 earlier in the week.

On Capitol Hill, Senate confirmation hearings are underway for Trump's Cabinet picks and Treasury secretary nominee Scott Bessent will face questions at 10:30 a.m. ET.

U.S.-listed shares of Taiwan Semiconductor Manufacturing Co TSM.N rose 5.8% after the company posted a record quarterly profit on surging demand for chips used in artificial intelligence processing.

Other chip stocks Nvidia NVDA.O rose 1% and Broadcom AVGO.O added 3.7%, sending the broader chip index .SOX up 1%.

Advancing issues outnumbered decliners by a 1.05-to-1 ratio on the NYSE and by a 1.26-to-1 ratio on the Nasdaq.

The S&P 500 posted 11 new 52-week highs and eight new lows, while the Nasdaq Composite recorded 31 new highs and 59 new lows.

(Reporting by Johann M Cherian, Medha Singh, Shashwat Chauhan and Sukriti Gupta in Bengaluru; Editing by Shinjini Ganguli and Maju Samuel)

((johann.mcherian@thomsonreuters.com;))