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Caterpillar ( CAT ) falls after Morgan Stanley downgrades rating

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Boeing ( BA ) slips after job-cut plans, jet delivery delay

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B. Riley Financial ( RILY ) soars after company says will sell unit

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Indexes: Dow down 0.10%, S&P 500 up 0.51%, Nasdaq up 0.86%

(Updated at 09:46 a.m. ET/1346 GMT)

By Lisa Pauline Mattackal and Purvi Agarwal

Oct 14 (Reuters) -

The S&P 500 and Nasdaq rose on Monday, with the benchmark

index touching an intraday record high as investors geared up

for a week packed with corporate earnings and crucial economic

data that will likely test stretched stock market valuations.

Chip stocks drove the gains, with the S&P 500 building

on the record close it notched on Friday after major banks

kicked off the third-quarter corporate

earnings season

on a positive note.

Growth stocks such as Nvidia ( NVDA ) and Apple ( AAPL )

gained 2.2% and 1.6%, respectively. An index of semiconductor

companies jumped to a more than two-month high.

Five of the 11 S&P 500 sectors inched higher, with

Technology shares in the lead, gaining 1.5%. Energy

fell 0.4%, tracking lower oil prices.

The Dow, however, was bogged down by Caterpillar ( CAT )

, which dipped 3% after Morgan Stanley downgraded the

equipment maker to "underweight" from "equal weight".

The Dow Jones Industrial Average fell 42.89

points, or 0.10%, to 42,820.42, the S&P 500 gained 29.72

points, or 0.51%, to 5,844.75 and the Nasdaq Composite

gained 158.43 points, or 0.86%, to 18,501.37.

Boeing ( BA ) also dragged on the Dow and was down 2.4%

after the planemaker flagged a larger-than-expected Q3 loss on

Friday. It also said it would cut 17,000 jobs and delay first

deliveries of its 777X jet by a year.

Bank earnings may have boosted hopes that solid results

could help stocks continue their strong 2024 run. However, with

stock valuations stretched - the S&P 500 is trading at 21.8

times forward earnings, versus a long-term average of 15.7 -

companies might struggle to satisfy investors.

"We closed pretty strong on Friday, thanks to the bank

earnings results. JPMorgan was clearly the standout, setting a

tone of optimism going into a bigger part of earnings season

this week," said Michael James, managing director of equity

trading at Wedbush Securities.

Forty-one S&P 500 companies are expected to report results

this week, including Bank of America ( BAC ), Citigroup ( C/PN ),

Johnson & Johnson ( JNJ ) and Netflix ( NFLX ).

Year-over-year third-quarter earnings growth for the S&P 500

is estimated at 4.9%, according to data compiled by LSEG on

Friday.

Investors will also watch for crucial economic data, notably

the September retail sales figures, due on Thursday, for clues

on the financial health of U.S. consumers.

Meanwhile, Minneapolis Fed President Neel Kashkari said he

sees modest interest-rate cuts ahead as inflation looms near the

central bank's 2% target.

Fed Governor Christopher Waller is also scheduled to

speak later in the day.

Bets on a 25-basis-point reduction at the Fed's November

meeting stood at 84.2%, according to the CME Group's FedWatch

tool, as traders dialed back expectations of an outsized cut.

Investment bank B. Riley Financial ( RILY ) leapt 20% after

the company said it had agreed to sell its unit, Great American

Group, to asset management firm Oaktree Capital in a

$386-million deal.

U.S.-listed shares of Chinese firms dropped, with Alibaba

down 1.3% and PDD Holdings ( PDD ) losing 3.9%, as

investors were left guessing the size of the overall fiscal

stimulus China announced on Saturday.

Declining issues outnumbered advancers by a 1.41-to-1

ratio on the NYSE, and by a 1.23-to-1 ratio on the Nasdaq.

The S&P 500 posted 32 new 52-week highs and one new low,

while the Nasdaq Composite recorded 79 new highs and 36 new

lows.