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Nvidia ( NVDA ) jumps on report of new AI chip for China market

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CrowdStrike ( CRWD ) slips after Friday's global cyber outage

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Verizon falls on Q2 revenue miss

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Indexes: Dow flat, S&P up 0.51%, Nasdaq up 0.74%

(Updated at 11:44 a.m. ET/1544 GMT)

By Ankika Biswas, Shubham Batra and Lisa Pauline Mattackal

July 22 (Reuters) -

The S&P 500 and the Nasdaq recouped some of the previous

week's losses on Monday, as investors reexamined the chances of

a second presidential term for Republican nominee Donald Trump

after U.S. President Joe Biden pulled out of the race.

Biden

announced his withdrawal

and endorsed Vice President Kamala Harris's candidature for

the November election on Sunday. Online betting site PredictIt

showed pricing for a Donald Trump victory slipped 4 cents, to 60

cents, while climbing 12 cents for a Harris win, to 39 cents.

Stocks firmed after a three-day sell-off, with megacaps such

as Alphabet, Meta Platforms and Tesla

gaining between 1.8% and 3%.

The Information Technology index topped

sectoral gainers and was on track to snap a four-day losing

streak.

At 11:44 a.m. ET, the Dow Jones Industrial Average

was down 0.95 points, or -0.00%, at 40,286.58, the S&P 500

was up 28.28 points, or 0.51%, at 5,533.28, and the

Nasdaq Composite was up 130.89 points, or 0.74%, at

17,857.83.

Trump-linked stocks were mixed, with Trump Media &

Technology Group ( DJT ) dropping 2.4%, while software firm

Phunware ( PHUN ) gained 1.4%.

Biden's exit could prompt investors to unwind trades on bets

that a Republican victory would increase U.S. fiscal and

inflationary pressures. But some analysts said markets could

benefit from an increased chance of a divided government under

the next administration.

"Trump still has the lead, but everybody is also waiting to

see who Harris will select for her running mate, which adds

uncertainty, but also a little bit of excitement to the

campaign," said Sam Stovall, chief investment strategist, CFRA

Research.

The question of who will be on the Democratic

presidential ticket compounds investor unease ahead of quarterly

earnings, including from two of the so-called Magnificent Seven

companies - Alphabet and Tesla.

The results will test whether the recent rally in

top-tier high-momentum stocks is tenable and if a move to

underperforming sectors will continue. The small-cap Russell

2000 gained 0.3%.

"There is an awful lot of underperformance in the

small-cap stocks that investors can take advantage of... They

are very inexpensive by historic measures," Stovall said.

Crucial economic data including the Personal Consumption

Expenditures Price Index - the Federal Reserve's preferred

inflation gauge, which is expected to shed light on the monetary

policy outlook - is due through the week.

Traders have broadly priced in a 25-basis-point rate cut by

September and two cuts by the year-end, according to LSEG and

CME's FedWatch data.

Cybersecurity firm CrowdStrike ( CRWD ) slumped 12.9%, set

to extend losses after a software update from the company

sparked Friday's global tech outage.

Delta Air Lines ( DAL ) lost 1.9% after canceling over

600 flights as it struggled to restore operations after the

outage.

Nvidia ( NVDA ) rose 2.5% after Reuters reported the AI chip

leader was working on a version of its new flagship AI chips for

the China market that would be compliant with current U.S.

export controls.

Verizon Communications ( VZ ) fell 6.1% after a

second-quarter revenue miss.

Advancing issues outnumbered decliners by a 2.00-to-1 ratio

on the NYSE, and by a 1.33-to-1 ratio on the Nasdaq.

The S&P index recorded 10 new 52-week highs, while the

Nasdaq recorded 34 new highs and 69 new lows.