* Indexes: Nasdaq down 1.44%, S&P 500 down 0.78%, Dow up

0.12%

* Oracle, chip stocks fall after WSJ report on OpenAI

* UPS falls after Q1 profit drops

* General Motors ( GM ) slips after results

* Coca-Cola rises after lifting annual forecast

* UAE to leave OPEC

(Updates with late morning trading)

By Niket Nishant and Utkarsh Hathi

April 28 (Reuters) - The Nasdaq Composite fell on

Tuesday, underperforming the benchmark S&P 500 and the blue-chip

Dow, after a report that said OpenAI had missed its internal

revenue target raised fresh concerns about the AI spending

spree.

The Wall Street Journal reported that AI heavyweight OpenAI

had missed internal targets for weekly users and revenue, and

executives had raised concerns over the ChatGPT parent's ability

to support its massive spending on data centers.

Although OpenAI is privately held, its fortunes are closely

tied to several major technology stocks. Its financial

performance is often viewed as a gauge of AI demand and could

have wide-ranging implications for public equity markets.

Shares of Oracle, whose reliance on OpenAI for its

cloud computing ambitions has been under scrutiny, fell 4.1%.

Chip stocks also dropped, with Nvidia ( NVDA ), AMD

and Arm Holdings down 3.5%, 5% and 8.8%,

respectively. Nvidia ( NVDA )-backed CoreWeave ( CRWV ) slid 6.2%.

"Any misstep involving AI-related demand or capital budget

expenditures from one of the four Magnificent 7 companies

reporting Wednesday could easily give this market second

thoughts about how far it has run in the past month," wrote

Dennis Follmer, chief investment officer at Montis Financial.

Amazon ( AMZN ), Meta, Microsoft ( MSFT ) and

Google-parent Alphabet are among several companies

reporting results on Wednesday.

At 11:49 a.m. ET, the Nasdaq Composite

dropped 357.34 points, or 1.44%, to 24,529.76. The S&P

500 slipped 55.80 points, or 0.78%, to 7,118.11, while

the Dow Jones Industrial Average rose 60.16 points,

or 0.12%, to 49,227.01.

The S&P 500 information technology sector slipped

2.2%, the biggest laggard on the benchmark. Six of the eleven

major S&P sectors were in the red.

The Philadelphia SE Semiconductor Index dropped 4.7%

and was on course for its second day of losses after an 18-day

winning streak during which it gained 47.2%.

MIDDLE EAST STALEMATE WEIGHS ON SENTIMENT

The U.S.-Iran war remains an overhang on equities, shaping

market sentiment even during the busiest week of the corporate

earnings season this quarter. There are mounting concerns that

the impasse in negotiations could keep oil prices elevated for

longer.

A U.S. official said President Donald Trump was unhappy with

the latest Iranian proposal ​on resolving the conflict in the

Middle East, pouring cold water on hopes for a deal that had

sent the S&P 500, the Nasdaq 100, and the Nasdaq

Composite to record highs in recent days.

"If the diplomatic and military stalemate between the U.S.

and Iran continues, and the Strait of Hormuz remains largely

closed, policymakers and market participants will find it

increasingly difficult to keep 'looking through' the crisis,"

said Jonas Goltermann, chief markets economist at Capital

Economics.

In a fresh blow to oil exporting countries, the United Arab

Emirates said on Tuesday it was quitting the oil producers'

group OPEC.

Oil prices are 53% higher than pre-war levels as the crucial

shipping route through the Strait of Hormuz remains

disrupted. Brent crude futures topped $110 a barrel for

the first time in three weeks.

Meanwhile, investors are also scrutinizing earnings from a

bunch of corporate giants on Tuesday.

United Parcel Service ( UPS ) lost 4.4% after the logistics

firm reported a sharp drop in quarterly adjusted profit.

General Motors ( GM ) lifted its full-year earnings forecast

on a resilient U.S. car market and an expected tariff refund.

Shares of the automaker were down 2.6%, trimming losses after a

4.1% drop earlier.

Coca-Cola climbed 6.1% after the beverage giant

lifted its annual adjusted profit forecast.

Declining issues outnumbered advancers by a 1.61-to-1 ratio

on the NYSE and by a 1.77-to-1 ratio on the Nasdaq.

The S&P 500 posted three new 52-week highs and 13 new

lows while the Nasdaq Composite recorded 80 new highs and 77 new

lows.