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US weekly jobless claims decline

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Tesla rises on plans to launch full self-driving software

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JetBlue ( JBLU ) jumps after Q3 revenue forecast hike

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Indexes: Dow flat, S&P 500 up 0.28%, Nasdaq up 0.83%

(Updated at 10:11 a.m. ET/1411 GMT)

By Johann M Cherian and Purvi Agarwal

Sept 5 (Reuters) - The Nasdaq and the S&P 500 inched up

on Thursday after a services activity survey allayed some fears

of a slowdown in economic activity, while focus continues to be

on the Federal Reserve's interest rate cut that is expected

later this month.

An Institute for Supply Management survey showed services

sector activity, a large part of the U.S. economy, rose to 51.5

in August, above expectations of 51.1.

Aiding sentiment, the number of Americans filing new

applications for jobless benefits declined last week, according

to a Labor Department report.

On the flip side, ADP National Employment data showed

private employers hired the fewest number of workers in 3-1/2

years in August, ahead of Friday's crucial nonfarm payrolls

figure.

Traders' bets for a 25-basis point reduction in interest

rates at the Fed's September meeting now stand at 55%, according

to the CME Group's FedWatch Tool. Bets for a larger 50-bps cut

rose to 45% from 34% a week earlier.

"The one positive you could take away is that layoffs seem

to remain somewhat muted. If you look at initial claims data,

hiring has fallen off of a cliff," Ross Mayfield, investment

strategist at Baird, said.

At 10:11 a.m. the Dow Jones Industrial Average fell

12.19 points, or 0.03%, to 40,962.78, the S&P 500 gained

15.33 points, or 0.28%, to 5,535.40 and the Nasdaq Composite

gained 141.92 points, or 0.83%, to 17,226.22.

The tech-heavy Nasdaq outperformed, led by Nvidia ( NVDA )

that rose 2.5% after the AI chip firm fell more than 11% in the

previous two sessions.

Other megacap stocks also rebounded, with Amazon.com ( AMZN )

rising 3.2%, while Apple ( AAPL ) and Alphabet

added more than 1.2% each.

September has been historically weak for U.S. equities, with

the benchmark S&P 500 down about 1.2% for the month on average

since 1928. The index is down more than 2% so far this week and

tech stocks have fallen over 3%.

Six of the 11 S&P 500 sectors traded higher. Consumer

discretionary stocks rose 1.9%, with Tesla among the

top boosts.

The electric-vehicle maker's shares jumped 6% after

it said it will launch the full self-driving advanced driver

assistance software in the first quarter next year in Europe and

China, pending regulatory approval.

C3.ai ( AI ) tumbled 11% after the AI software firm missed

quarterly subscription revenue estimates.

Frontier Communications dropped 9% after Verizon

said it would buy the company in an all-cash deal worth

$20 billion.

JetBlue Airways ( JBLU ) jumped 8.2% after the carrier

raised its third-quarter revenue forecast.

Leading up to the U.S. presidential elections, Goldman Sachs

analysts said Democratic presidential candidate Kamala Harris'

proposed corporate tax hike could lower earnings for companies

on the S&P 500 index by about 5%, while Republican candidate

Donald Trump's proposed relief would boost earnings by about 4%.

Advancing issues outnumbered decliners for a 1.78-to-1 ratio

on the NYSE and a 1.48-to-1 ratio on the Nasdaq.

The S&P 500 posted 35 new 52-week highs and seven new lows,

while the Nasdaq Composite recorded 23 new highs and 56 new

lows.