(Updates prices to late afternoon)

* Indexes mixed: Dow up 0.30%, S&P 500 off 0.04%, Nasdaq

down 0.65%

* Intel ( INTC ) falls despite upbeat quarterly revenue, profit

forecast

* Digital Realty ( DLR ) eyes best day in 17 years on upbeat outlook

By Sinéad Carew and Ragini Mathur

July 24 (Reuters) - The tech-heavy Nasdaq fell on Friday as

investors sold chip stocks on worries about massive AI spending

plans ahead of the next batch of megacap earnings reports, but

falling oil prices limited losses even as Middle East

hostilities continued.

The S&P 500 technology index fell with the biggest

drags coming from chip stocks. Investors awaited results next

week from megacaps Microsoft ( MSFT ), Amazon.com ( AMZN ), Meta

and Apple Inc.

After piling into technology companies in recent years, on the

promise of growth from AI, investors have become worried about

the need for ever-increasing capital outlays, according to Peter

Andersen, CEO of Andersen Capital Management.

The money manager said that investors were still worrying about

a big hike in capital spending announced by Alphabet late on

Wednesday.

"People are thinking, how do we make sense of all this

spending, and how much more patient do we have to be before we

actually see it translate to actual profits?" Andersen said.

"The fear of missing out is becoming more like a fear of massive

overbuilding."

Intel ( INTC ) forecast quarterly profit and revenue above Wall

Street estimates and outlined plans to increase spending over

the next two years late on Thursday. But the chipmaker's shares

tumbled about 6% on Friday while the Philadelphia SE

Semiconductor index fell 4% on Friday.

At 2:45 p.m., the Dow Jones Industrial Average rose

156.90 points, or 0.30%, to 51,868.55, the S&P 500 lost

2.91 points, or 0.04%, to 7,405.39 and the Nasdaq Composite

lost 164.66 points, or 0.65%, to 24,973.03.

Eight of the S&P 500's 11 major sectors were gaining ground

with real estate the biggest gainer, up 2.3%. The

biggest decliners were technology, down 0.8%, and consumer

discretionary, down 0.3%.

The real estate sector's leading gainer was Digital Realty Trust ( DLR )

, which jumped 12.8% after the firm raised its full-year

forecast for funds from operations.

Providing some support to equities was a 4% drop in crude oil

futures while traders booked profits from a massive rally in the

last five sessions and after sources said that China was pushing

to resume stalled U.S.-Iran peace talks. Still, U.S. missiles

struck targets across Iran after President Donald Trump vowed

"major military punishment" for Tehran and its Houthi allies in

Yemen.

"Whatever the headlines are involving the conflict right now,

that drives oil and then oil drives financial markets," said

Andersen, adding that swings in oil prices can impact consumer

and corporate spending.

Elsewhere in politics, the Trump administration imposed new

tariffs of 10% and 12.5% on goods from 60 trading partners,

citing lax enforcement of forced-labor bans. The move came as a

temporary 10% global tariff expired.

Friday's data showed that activity in the U.S. services sector

accelerated in July, aided in part by spending around the FIFA

World Cup and the Independence Day holiday, while the pace of

growth in the manufacturing sector eased to the slowest since

March.

Among others, SLB gained 11% after the oilfield services

firm beat expectations for second-quarter profit.

Advancing issues outnumbered decliners by a 1.52-to-1 ratio on

the NYSE where there were 142 new highs and 156 new lows. On the

Nasdaq, 2,172 stocks rose and 2,498 fell as declining issues

outnumbered advancers by a 1.15-to-1 ratio.

The S&P 500 posted 16 new 52-week highs and 4 new lows while

the Nasdaq Composite recorded 70 new highs and 176 new lows.