*

Producer prices up more than expected in April

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Fed's Powell: PPI 'mixed', next move unlikely to be a rate

hike

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Meme stocks extend gains, Home Depot ( HD ) shares fall after

report

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Alphabet advances after AI updates

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Indexes rise: Dow 0.32%, S&P 0.48%, Nasdaq 0.75%

(Updates with final closing prices, volume data)

By Sinéad Carew and Bansari Mayur Kamdar

May 14 (Reuters) -

The Nasdaq scored a record closing high on Tuesday and the

S&P 500 and the Dow also advanced as Federal Reserve Chair

Jerome Powell reassured investors while they digested Tuesday's

data and waited for Wednesday's crucial consumer inflation

report.

U.S. producer prices increased more than expected in April

as the cost of services and goods rose sharply, leading traders

to pare back bets of a first rate cut in September.

But Powell on Tuesday described the producer price index

report as more mixed than hot given that prior-period data was

revised lower.

Investors were also encouraged by Powell's comment that he

did not expect the central bank's next interest rate move to be

a hike, despite a recent run of higher-than-expected inflation.

"The market is getting more comfortable with

higher-for-longer rates. The real question has been lately if a

hike is a possibility and Powell's reiterating that it's not on

the table right now," said Lindsey Bell, chief strategist, 248

ventures, Charlotte, North Carolina. She also noted that stocks

appeared to gain ground during the session as Treasury yields

declined.

"It seems that the bond market is digesting all this and the

stock market is reacting to the bond market," Bell said.

Still, investors cautiously awaited Wednesday's Consumer

Price Index figures to assess whether upside surprises in the

first quarter extended into April.

Sticky inflation and persistent labor market strength have

prompted financial markets and most economists to push bets for

an initial Fed rate cut back to September from March previously.

Still, stocks have rallied so far this year, thanks to

better-than-expected earnings for the first quarter and

expectations that the Fed would cut rates.

While the tech-heavy Nasdaq composite easily cleared its

April 11 record close, the S&P 500 ended the day around 0.1%

below its March 28 record close. The Dow ended less than 1%

below its record close, also reached on March 28.

The Dow Jones Industrial Average rose 126.60

points, or 0.32%, to 39,558.11. The S&P 500 gained 25.26

points, or 0.48%, at 5,246.68 and the Nasdaq Composite

advanced 122.94 points, or 0.75%, to 16,511.18.

Among the S&P's 11 major industry sectors, consumer

staples was the biggest decliner, down 0.2%, while

technology was the biggest gainer, adding 0.9%.

Shares of Alphabet closed up 0.7% after the Google

parent showed how it is using artificial intelligence across its

businesses, including a beefed-up Gemini chatbot and

improvements to its search engine.

Shares in Home Depot ( HD ) closed down 0.1% after falling

more than 2% earlier in the day following the retailer's

quarterly report, which showed that same-store sales fell more

than expected as Americans focused on small-scale home projects,

spending less on big-ticket items.

U.S.-listed shares of Alibaba ( BABA ) ended down 6% after

it reported an 86% drop in fourth-quarter profit.

On Holding rallied 18.3% as the footwear maker

raised its annual sales forecast after beating quarterly sales

expectations, citing strong demand for its running shoes.

U.S. President Joe Biden unveiled a bundle of steep tariff

increases on an array of Chinese imports including electric

vehicles, computer chips and medical products.

U.S.-listed shares of Chinese EV maker Li Auto ( LI ) fell

more than 2% while Tesla gained more than 3%.

GameStop ( GME ) shares extended their recent rally to close

up 60% at $48.75 after flag bearer Roaring Kitty posted on X.com

for the first time in three years.

Other 2021 meme rally participants and highly shorted stocks

also advanced with AMC Entertainment ( AMC ) rising almost 32%

to $6.85 and Koss Corp ( KOSS ) ending up 40.7% at $6.15.

The most heavily traded NYSE shares were AMC and GameStop ( GME ).

Advancing issues outnumbered decliners by a 2.43-to-1 ratio on

the NYSE where there were 358 new highs and 31 new lows.

On the Nasdaq, advancing issues outnumbered decliners by

a 1.87-to-1 ratio and it recorded 171 new highs and 74 new lows.

The S&P 500 posted 31 new 52-week highs and no new lows.

On U.S. exchanges 13.66 billion shares changed hands

compared with the 10.91 billion moving average for the last 20

sessions.