*

Apple ( AAPL ) falls after analyst flags weak demand for new

iPhones

*

Intel ( INTC ) rises after report chipmaker qualifies for federal

grants

*

Dow hits intraday record high

*

Indexes: Dow up 0.63%, S&P 500 down 0.02%, Nasdaq down

0.68%

(Updated at 09:50 a.m. ET/1350 GMT)

By Johann M Cherian and Purvi Agarwal

Sept 16 (Reuters) -

Technology stocks weighed on the S&P 500 and the Nasdaq on

Monday as caution set in ahead of the Federal Reserve's pivotal

monetary policy decision, due later in the week, with a majority

of traders pricing in a steep reduction in borrowing costs.

Rate-sensitive chip stocks fell, with Nvidia ( NVDA ),

which led much of this year's rally, down 2%, Broadcom ( AVGO )

dropping 2.2% and Qualcomm ( QCOM ) losing 1.5%, sending the

Philadelphia SE Semiconductor index lower by 1.7%.

Other growth stocks also took a hit. Amazon.com ( AMZN )

lost 0.70% and Tesla fell 1.7%. Apple ( AAPL ) slid

3.2% after an analyst at TF International Securities said demand

for its latest iPhone 16 models was

lower than expected

.

Markets have been in a bull run since the start of this

year on expectations the world's most influential central bank

would kick off its monetary policy easing cycle soon.

The Dow hit an intraday record high and the S&P

500 is just shy of its own milestone.

The benchmark index and the tech-heavy Nasdaq

notched their biggest weekly jumps in about 11 months on Friday,

although analysts attributed the optimism to signs of a robust

economy rather than rate-cut expectations.

Following a diverse batch of economic reports and

comments from a former policymaker in the last few weeks,

traders swayed in their bets on what decision the central bank

would arrive at during its Sept. 17 to 18 meeting.

Odds for a 50-basis-point cut are at 61% from 30% a week

ago, according to the CME FedWatch Tool, which showed a 39%

probability of a 25-basis-point reduction. There is concern that

an outsized move could mean the Fed sees the economy cooling at

a faster-than-anticipated pace.

"Influential investors have been talking about the need for

a 50-basis-point cut and we're seeing increased talk of

recession risks. As a result, there's betting that we will get

something other than the 25-bps cut," said Sam Stovall, chief

investment strategist at CFRA Research.

"It would be a good thing for the Fed to imply that they

are ahead of the curve."

At 09:50 a.m. the Dow Jones Industrial Average rose

260.54 points, or 0.63%, to 41,654.32, the S&P 500 lost

1.70 points, or 0.02%, to 5,625.06 and the Nasdaq Composite

lost 123.01 points, or 0.68%, to 17,564.41.

Seven of the 11 S&P 500 sectors gained, although

rate-sensitive tech stocks declined 1.2%, while banks

rose 0.70%.

Among other movers, Intel Corp ( INTC ) climbed 2.7% after a

report showed the chipmaker has officially qualified for as much

as $3.5 billion in federal grants to make semiconductors for the

U.S. Department of Defense.

In economic data, reports on retail sales, weekly jobless

claims, housing starts and industrial production are due through

the week.

Advancing issues outnumbered decliners by a 2.03-to-1 ratio

on the NYSE, and by a 1.16-to-1 ratio on the Nasdaq.

The S&P 500 posted 75 new 52-week highs and one new low,

while the Nasdaq Composite recorded 84 new highs and 24 new

lows.