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Tesla up after Morgan Stanley adds stock to 'top pick'

list

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Crypto stocks rise as Bitcoin prices touch seven-week high

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Abbott slides after trial verdict on premature-infant

formula

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Indexes: Dow down 0.35%, S&P 500 up 0.20%, Nasdaq up 0.67%

(Updated at 9:51 a.m. ET/1351 GMT)

By Ankika Biswas and Johann M Cherian

July 29 (Reuters) -

The Nasdaq and the S&P 500 rose on Monday, buoyed by megacap

stocks as investors awaited Big Tech results, a Federal Reserve

policy decision and crucial labor numbers this week.

Nvidia ( NVDA ), Alphabet, Amazon.com and

Meta Platforms ( META ) were up between 0.6% and 1.5% following

the recent rout in megacap tech shares, which saw the main stock

indexes spiral downward last week.

At 9:51 a.m. ET, the Dow Jones Industrial Average was

down 140.72 points, or 0.35%, at 40,448.62, the S&P 500

was up 11.18 points, or 0.20%, at 5,470.28, and the Nasdaq

Composite was up 116.46 points, or 0.67%, at 17,474.34.

The S&P 500 Consumer Discretionary index led

sectoral gains with a 0.9% rise, boosted by a 4.4% jump in

Tesla's shares after Morgan Stanley added the EV

maker's stock to its U.S. autos list as a "top pick".

The three major U.S. stock indexes jumped more than 1% on

Friday after hopes of an early start to monetary policy easing

were boosted by an encouraging U.S. inflation report, close on

the heels of recent data signaling a loosening jobs market.

However, the S&P 500 and the Nasdaq failed to recoup losses

and closed the week lower after a disappointing start to tech

earnings prompted the indexes to log their steepest one-day

slide since 2022 on Wednesday.

The next test for markets are earnings from Microsoft, Meta,

Apple and Amazon.com, starting on Tuesday, which investors will

watch to gauge if the AI-led equity rally has room to grow.

Technology behemoths have dominated Wall Street's

record-breaking run, prompting investors to turn their attention

to laggards such as mid and small caps.

"This is the correct time (for a rotation) because the Fed

is more likely to cut rates, so this time it can be a little

more long lasting," said Art Hogan, chief market strategist at B

Riley Wealth.

The Russell 2000 small-cap index was up 0.1%

after a three-week winning streak, just shy of levels last seen

more than two-and-a-half years ago.

Hopes are pinned on the Fed signaling a rate cut in

September in Wednesday's policy decision, with odds for a

25-basis-point reduction at 89%, according to the CME's

FedWatch. Any hawkish commentary could put equities under

renewed selling pressure.

"(Fed Chair) Powell will want to give the market a bit of a

hint that their expectations are probably not out of bounds,

that September could be the first rate cut," Hogan said.

A slew of employment reports this week, including the

Non-farm Payrolls, will be scrutinized for insight into a

somewhat easing labor market.

Crypto stocks such as Coinbase Global ( COIN ), Riot

Platforms ( RIOT ) and Marathon Digital ( MARA ) gained between

2.4% and 3.6% after bitcoin prices jumped to a seven-week

high.

Abbott Laboratories ( ABT ) dropped 4.1% to the bottom of

the S&P 500 after a jury ordered it to pay $495 million in

damages following a trial that found the healthcare company's

formula for premature infants had caused a dangerous illness.

Advancing issues outnumbered decliners by a 1.23-to-1

ratio on the NYSE, and by a 1.09-to-1 ratio on the Nasdaq.

The S&P index recorded 15 new 52-week highs and one new low,

while the Nasdaq recorded 73 new highs and 29 new lows.