*

Indexes: Dow down 0.32%, S&P 500 up 0.38%, Nasdaq up 0.68%

*

Financials drag on Dow but indexes set for weekly gains

*

Walmart ( WMT ) falls after announcing CEO retirement

*

Cidara Therapeutics ( CDTX ) soars on Merck's ( MRK ) buyout deal

(Updates with mid-morning prices, analyst comment)

By Twesha Dikshit and Purvi Agarwal

Nov 14 (Reuters) - The S&P 500 and the Nasdaq gained in

choppy trading on Friday, reversing course after a brief

sell-off in technology stocks, while hawkish comments from

Federal Reserve policymakers deepened doubts of an interest rate

cut in December.

Wall Street's main indexes had lost more than 1% each

earlier in the session over worries about stretched AI stock

valuations, which have weighed on markets this week. However,

investors saw it as an opportunity to buy expensive stocks at

relatively cheaper prices.

"This week is a tug-of-war between increased concern over

the durability of the AI story against the buy the dip

instinct," said Mark Hackett, chief market strategist at

Nationwide.

At 12:02 p.m. ET, the Dow Jones Industrial Average

fell 151.64 points, or 0.32%, to 47,305.58, the S&P 500

gained 25.43 points, or 0.38%, to 6,763.11 and the Nasdaq

Composite gained 155.46 points, or 0.68%, to 23,025.81.

The CBOE Volatility Index, Wall Street's fear gauge,

touched a one-week high earlier and was last down 0.13 points at

19.83.

S&P 500 tech stocks rose 1.3%, with AI bellwether

Nvidia ( NVDA ) up 1.7% after dropping more than 3% in early

trading.

Nvidia's ( NVDA ) results next week could further make or break the

stock's rally, which has been the main driver behind indexes

hitting all-time record highs this year.

Phil Blancato, chief executive officer at Ladenburg Thalmann

Asset Management, said Nvidia's ( NVDA ) results, expected to be

"strong", were adding to reasons for "buying the dip".

Other chip stocks were also higher, with Advanced Micro

Devices ( AMD ) and Broadcom ( AVGO ) up about 1.2% each. The

broader semiconductor index gained 1.1%.

Financial stocks such as Goldman Sachs ( GS ) and American

Express ( AXP ) bogged down the Dow.

Meanwhile, a growing number of Fed policymakers signaled

reticence on further rate cuts in December.

Kansas City Fed President Jeffrey Schmid, who was one of two

dissenters on the central bank's October decision to cut

interest rates, said the current monetary policy stance was

"only moderately restrictive, which is about where I think it

should be".

Expectations for a 25-basis-point rate cut in December fell

to 45.6% from last week's 67%, according to CME Group's FedWatch

tool.

The three major U.S. stock indexes posted their steepest

one-day declines in over a month in the previous session.

However, all three were on track to end with weekly gains.

Some concerns also lingered around the health of the labor

market and the inflation outlook, as markets expect some

permanent data gaps despite a resolution on Thursday to the

historic U.S. government shutdown.

On the trade front, the Swiss government said U.S. tariffs

on Swiss goods will be reduced to 15% from 39%.

Among other stocks, Walmart ( WMT ) fell 1.2% after

announcing CEO Doug McMillon would retire next year.

Warner Bros Discovery ( WBD ) gained 3.7%. The entertainment

company said it had amended CEO David Zaslav's employment

agreement amid a strategic review of its business.

Cidara Therapeutics ( CDTX ) more than doubled after Merck ( MRK )

said it will acquire the company in a nearly $9.2

billion deal.

Declining issues outnumbered advancers by a 1.13-to-1 ratio

on the NYSE and by a 1.03-to-1 ratio on the Nasdaq.

The S&P 500 posted 9 new 52-week highs and 8 new lows while

the Nasdaq Composite recorded 39 new highs and 255 new lows.