* Indexes: Dow down 0.2%, S&P 500 up 0.3%, Nasdaq up 0.6%

* Domino's Pizza gains after Q2 revenue beat

* Alphabet rises after report co building new AI chips

* Alphabet, Tesla and Intel ( INTC ) to report earnings later in the

week

(Updates throughout)

By Ragini Mathur and Avinash P

July 20 (Reuters) - The S&P 500 and the Nasdaq rose on

Monday as chip stocks recovered from last week's sharp selloff,

while investors looked ahead to earnings from major technology

companies that have driven Wall Street's AI-fueled rally.

Alphabet added to the gains, rising 2.9% after a

report said its Google unit is developing a Gemini-integrated

server chip aimed at improving AI efficiency and easing

computing-capacity constraints.

The second-quarter earnings season will pick up pace this

week, with results due from Alphabet, Tesla, Intel ( INTC )

and IBM ( IBM ).

Investors will focus closely on Intel ( INTC ) and Texas Instruments ( TXN )

for any encouraging signs after a recent slide in

semiconductor shares.

A surge in AI capital spending by hyperscalers has been a

major driver behind this year's market gains, lifting chip

stocks and other companies that are seen as the beneficiaries of

the buildout, and helping Wall Street climb to record levels.

But last week's selloff raised concerns that valuations had

run too far, too fast.

The Philadelphia SE Semiconductor Index ended Friday

more than 20% below its late-June record high, confirming a

bear-market decline. The gauge was up 1.9% on Monday.

"Our expectation is that earnings will continue to be good.

It's just a little bit harder to tell if they will be better

than expected because there's such a high bar at this point,"

said Chris Zaccarelli, chief investment officer for Northlight

Asset Management.

Markets are expecting S&P 500 earnings growth of 26% for the

second quarter, year-on-year, up from an earlier estimate of

23.7%, according to data compiled by LSEG.

At 11:49 a.m. ET, the Dow Jones Industrial Average

fell 123.88 points, or 0.24%, to 52,022.54, the S&P 500

gained 20.88 points, or 0.28%, to 7,478.57 and the Nasdaq

Composite gained 147.22 points, or 0.58%, to 25,667.46.

Memory chipmakers were leading the gains among semiconductor

stocks. Micron Technology ( MU ) and SanDisk ( SNDK ) were up

4.8% and 6%, respectively.

The S&P 500's information technology and

communication services sector gained 0.8% and 1.8%,

respectively.

Last week's declines in major U.S. indexes came despite

benign inflation data, which eased some concerns about a Federal

Reserve rate increase this month, and a solid start to the

second-quarter earnings season from major U.S. banks.

Traders now see a roughly 14% chance of a quarter-point rate

increase at the Fed's July meeting and a 55% chance of a similar

move in September, according to CME's FedWatch tool.

"Higher interest rates could be a real Achilles' heel for

the market. If that were to happen, you have to question

valuations, and that could impact the durability of this rally,"

Zaccarelli said.

Investors were also tracking developments in the

U.S.-Israeli war with Iran after a recent escalation in the

nearly five-month-old conflict revived inflation worries. In the

latest flare-up, Yemen's Iran-aligned Houthis said they were

imposing a naval blockade on Saudi Arabia.

Among other market movers, Domino's Pizza was up

1.0% after the pizza chain's quarterly revenue edged past Wall

Street estimates.

Advancing issues outnumbered decliners by a 1.17-to-1 ratio

on the NYSE, and by a 1.37-to-1 ratio on the Nasdaq.

The S&P 500 posted nine new 52-week highs and three new

lows, while the Nasdaq Composite recorded 39 new highs and 129

new lows.

(Reporting by Ragini Mathur and Avinash P in Bengaluru; Editing

by Shinjini Ganguli)