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Microsoft ( MSFT ) gains after new share-buyback plan, dividend

hike

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Intel ( INTC ) gains following collaboration with Amazon's ( AMZN ) AWS

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Retail sales unexpectedly rise in August

(Updated at 4 p.m. ET/2000 GMT)

By Chuck Mikolajczak

NEW YORK, Sept 17 (Reuters) - U.S. stocks closed nearly

unchanged on Tuesday, giving up earlier gains that had vaulted

the S&P 500 and Dow Industrial Average to record highs as

investors braced for the Federal Reserve interest-rate decision

on Wednesday.

The benchmark S&P 500 index touched 5,670.81 earlier in the

session, after fresh economic data eased worries of a sharp

slowdown in the U.S. economy.

The latest report from the U.S. Commerce Department showed

retail sales rose unexpectedly in August, after a decline in

auto dealership receipts was offset by strength in online

purchases, suggesting the economy was on solid footing through

most of the third quarter.

"Expectations were pretty well entrenched before calling

into today's economic data and what they showed was generally a

growth environment, but a relatively slow-growth environment,"

said Russell Price, chief economist at Ameriprise Financial

Services in Troy, Michigan.

"What you're seeing in this afternoon's trading is the way

we pulled off of the all-time high ... because tomorrow

somebody's going to be disappointed."

According to preliminary data, the S&P 500

gained 1.52 points, or 0.04%, to end at 5,634.61 points,

while the Nasdaq Composite gained 34.82 points, or

0.20%, to 17,626.95. The Dow Jones Industrial Average

fell 5.19 points, or 0.01%, to 41,616.89.

Markets are pricing in a 65% chance the Fed will cut

borrowing costs by 50 basis points at the conclusion of its

two-day meeting on Wednesday, according to the CME's FedWatch

Tool. Market expectations on the cut's size have been volatile

in recent days, with only a 34% chance of a 50-bps cut priced in

as of last week.

Microsoft ( MSFT ) was the biggest lift to the S&P 500, as

shares rose after the AI frontrunner's board approved a new

$60-billion share-buyback program and hiked its quarterly

dividend by 10%.

The blue-chip Dow hit a record high for a second-straight

day. The Russell 2000 index tracking small caps, which

investors view as likely to benefit from a lower rate,

outperformed the three major indexes.

Energy, was the best-performing of the 11 major S&P

sectors, buoyed by a climb in crude prices, while healthcare

was the worst-performing.

Among other movers, Intel ( INTC ) gained after signing

Amazon.com's ( AMZN ) cloud-services unit as a customer to make

custom artificial-intelligence chips. Amazon.com ( AMZN ) shares also

advanced.