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Expedia ( EXPE ) gains after Q2 profit beat

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Indexes: Dow up 0.1, S&P 500 up 0.4%, Nasdaq up 0.4%

(Updates to 2:40 p.m. ET)

By Caroline Valetkevitch

NEW YORK, Aug 9 (Reuters) -

U.S. stocks edged higher on Friday, with all three major

indexes set for small weekly losses after a rally in recent days

failed to bring Wall Street back from Monday's steep dive that

was prompted by fears of a recession and unwinding of a global

yen-funded carry trade.

The technology sector led gains among S&P 500

sectors for the day, but the S&P 500 and the Nasdaq

were headed for a fourth straight week of declines. The

Cboe Volatility Index, Wall Street's "fear gauge", was

down on Friday after surging to 65.73 at the start of the week.

Monday's big decline followed a sharp sell-off last week

as a weaker-than-expected July jobs report sparked recession

fears. Compounding losses was a Bank of Japan interest rate hike

on July 31, which led to a sharp appreciation in the yen, widely

used for buying high-yielding assets. Investors unwound currency

carry trade positions.

"There is going to continue to be a signficant amount of

uncertainty and anxiety hanging over the market for the course

of the next month until we get to the next Fed meeting," said

Michael James, managing director of equity trading at Wedbush

Securities in Los Angeles.

Investors now see a 55% chance that the Federal Reserve

will cut interest rates by 50 basis points at its next policy

meeting on Sept. 17-18, with a 25 basis point cut seen as having

a 45% probability, according to the CME Group's FedWatch Tool.

The Dow Jones Industrial Average rose 27.13

points, or 0.07%, to 39,473.62, the S&P 500 gained 21.67

points, or 0.41%, to 5,340.98 and the Nasdaq Composite

added 72.48 points, or 0.44%, to 16,732.50.

Investors await next week's readings on U.S. consumer prices

and retail sales for July, which could provide fresh evidence on

the chances of a soft landing for the American economy.

On Thursday, Fed policymakers expressed confidence that

inflation was cooling enough to allow interest-rate cuts ahead,

and will take their cues on the size and timing of those cuts

from the economic data.

Among individual stocks, videogame publisher Take-Two

Interactive Software ( TTWO ) climbed as it expects net bookings

to grow in fiscal years 2026 and 2027.

Expedia ( EXPE ) also advanced after the online travel

agency beat analysts' expectations for second-quarter profit.

Advancing issues outnumbered declining ones on the NYSE by a

1.22-to-1 ratio; on Nasdaq, a 1.26-to-1 ratio favored decliners.

The S&P 500 posted 13 new 52-week highs and 3 new lows;

the Nasdaq Composite recorded 48 new highs and 142 new lows.

(Additional reporting by Shubham Batra and Shashwat Chauhan in

Bengaluru; Editing by Shinjini Ganguli)