March 6, 2018 / 2:03 PM / a year ago

US STOCKS-Wall Street recovery lifted by signs of N Korea talks

* North Korea willing to hold talks with U.S. on denuclearization

* Trump tweets: we’ll see what happens

* Target shares slip after holiday quarter profit misses estimates

* Futures up: Dow 136 pts, S&P 11.25 pts, Nasdaq 40 pts (Changes comments, updates price)

By Ankur Banerjee and Sruthi Shankar

March 6 (Reuters) - Wall Street was set to open higher on Tuesday as the prospect of talks between North Korea and the United States and increasing resistance to President Donald Trump’s proposed metals tariffs encouraged risk appetite among investors.

North Korea is willing to hold talks with the United States on denuclearization and will suspend nuclear tests while those talks are under way, the South said on Tuesday after a delegation returned from the North after meeting leader Kim Jong Un.

Trump, in the first U.S. response, said on Tuesday: “We will see what happens.”

The news added to early gains for U.S. markets, which have been recovering from a bout of concern over the possibility of a global trade war following remarks by Trump last week.

“When geopolitical environment is improving, there’s very much a risk-on sentiment,” said Fiona Cincotta, senior market analyst at City Index in London.

“I would not say that trade war fears are completely erased ... there are doubts that Trump will actually manage to push the trade tariffs through.”

Investor fears were eased after Trump’s threat of hefty tariffs on aluminum and steel was seen as a negotiating tool following his tweet on Monday that Canada and Mexico could avoid the tariffs if they ceded ground in the North American Free Trade Agreement (NAFTA) talks.

Top U.S. Republicans, including House Speaker Paul Ryan, urged Trump on Monday not to go ahead with the tariffs.

“There’s also a lot of pressure regarding the tariff - not only GOP, trading partners but also many business leaders in the United States,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

By 8:37 a.m. ET, Dow e-minis were up 136 points, or 0.55 percent, S&P 500 e-minis were up 11.25 points, or 0.41 percent, Nasdaq 100 e-minis were up 40 points, or 0.58 percent.

Federal Reserve Bank of Dallas President Robert Kaplan told CNBC the base case on interest rate hikes has not changed and remains at three for the year, adding that the United States is either at or beyond full employment now.

Last month’s U.S. payrolls report showed wages growing at their fastest pace in more than eight years, fueling concerns that both inflation and interest rates would rise faster than expected that led to a steep selloff.

Investors are keenly waiting for the upcoming February jobs data due on Friday to gauge the strength of the labor market.

Federal Reserve Bank of New York President William Dudley is scheduled to speak later on Tuesday.

The U.S. Department of Commerce is scheduled to release factory orders data for January at 10 a.m. ET.

Target shares slipped 2 percent after the big-box retailer reported lower-than-expected profit for the holiday quarter. (Reporting by Ankur Banerjee in Bengaluru; Editing by Sriraj Kalluvila)

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