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Job openings stood at 8.18 million in June

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Procter & Gamble ( PG ) drops on sales expectations miss

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Merck ( MRK ) down after cutting annual profit forecast

By Chuck Mikolajczak

NEW YORK, July 30 (Reuters) -

The S&P 500 and Nasdaq stumbled to close lower on Tuesday,

weighed down by weak chip and megacap shares ahead of earnings

from heavyweight tech companies this week, but the Dow managed

modest gains.

Microsoft ( MSFT ), seen by many as leading the artificial

intelligence race, fell ahead of its quarterly results due after

the closing bell.

Chipmaker Nvidia, regarded as a prime

beneficiary of potential AI growth and the year's second best

S&P 500 performer, tumbled, weighing on other chip stocks and

the Philadelphia semiconductor index.

Other megacap names such as Apple ( AAPL ), Amazon.com ( AMZN )

and Meta Platforms ( META ), were all due to report

earnings this week. Amazon ( AMZN ) and Meta shares fell while Apple ( AAPL )

managed a slight gain on growing concerns that the stocks might

be overvalued.

"A lot of people are looking at artificial intelligence

now and saying this is all great but I how do I make money on

it," said Stephen Massocca, senior vice president at Wedbush

Securities in San Francisco.

"Financially the companies are probably doing quite

well, but the question is what are you paying for this? These

are not cheap stocks and so you need to go into these things

with your eyes open."

According to preliminary data, the S&P 500

lost 27.08 points, or 0.50%, to end at 5,436.46 points,

while the Nasdaq Composite lost 222.78 points, or 1.28%,

to 17,147.42. The Dow Jones Industrial Average

rose 205.96 points, or 0.51%, to 40,745.89.

Small cap and value stocks such as financials

outperformed the broader market to extend a recent

rotation out of more expensive stocks as the market has

solidified expectations the Federal Reserve will cut rates this

year following signs of moderating inflation.

The S&P 500 financials index jumped to lead gains among the

11 major S&P sectors while technology was the worst

performer.

Megacap stocks fell last week on Tesla's disappointing

results and Alphabet's higher expenditure forecast, prompting a

broad-based market sell-off.

The market is betting on a slight chance that the Fed will

cut rates by at least 25 basis points at the end of its

policymaking meeting on Wednesday, but it is completely pricing

in a cut for the U.S. central bank's September meeting, CME's

FedWatch Tool showed.

Several labor data releases are scheduled for this week,

culminating in Friday's government payrolls report. On Tuesday,

a Job Openings and Labor Turnover Survey pointed to 8.18 million

job openings in June, compared to economists' expectation of 8

million.

Among single stocks, Procter & Gamble ( PG ) tumbled after

missing fourth-quarter sales expectations.

Merck ( MRK ) plunged after the drugmaker cut its annual

profit forecast. CrowdStrike ( CRWD ) dropped after a report

that Delta Air Lines ( DAL ) sought compensation from the

cybersecurity firm and Microsoft ( MSFT ) for the carrier's global cyber

outage earlier this month.

Cybersecurity and cloud services company F5 surged

nearly after forecasting fourth-quarter results above estimates.