* Indexes mixed with Nasdaq lagging, Dow gaining
* Falling oil prices offer some relief
* Intel ( INTC ) falls despite upbeat quarterly revenue, profit
forecast
* Digital Realty ( DLR ) shares rally on upbeat outlook
(Updates with preliminary closing prices)
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 spending on
artificial intelligence ahead of the next batch of megacap
earnings reports, while falling oil prices provided Wall Street
with some support even as Middle East hostilities continued.
The S&P 500 ended close to flat but its biggest weight came
from the S&P 500 technology index, which
underperformed the broader market as chip stocks fell.
While investors wait for results from megacaps Microsoft ( MSFT )
, Amazon.com ( AMZN ), Meta and Apple Inc ( AAPL )
, their enthusiasm was weakened by Alphabet's
announcement, late on Wednesday, of a plan to hike capital
spending even as it burns cash.
After piling into technology stocks in recent years, on the
promise of growth from AI, investors have become worried about
the need for ever-increasing capital outlays for AI, according
to Peter Andersen, CEO of Andersen Capital Management.
"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."
Late on Thursday, Intel ( INTC ) forecast quarterly profit
and revenue above Wall Street estimates and outlined plans to
increase spending over the next two years. Still, the
chipmaker's shares sank on Friday along with the Philadelphia SE
Semiconductor index.
According to preliminary data, the S&P 500
gained 3.74 points, or 0.07%, to end at 7,413.30 points,
while the Nasdaq Composite lost 157.35 points, or 0.63%,
to 24,980.34. The Dow Jones Industrial Average
rose 235.87 points, or 0.46%, to 51,947.52.
Among the S&P 500's 11 major industry indexes, real estate
outperformed during the session. The sector's leading
gainer was Digital Realty Trust ( DLR ), which rallied after it
raised its full-year forecast for funds from operations.
Also providing some relief, crude oil futures fell more than
3% while traders booked profits from a massive rally in the last
five sessions and after sources said 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.
Also, 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 other individual gainers, SLB shares climbed
after the oilfield services firm beat expectations for
second-quarter profit.