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AMD up on plans to acquire ZT Systems for $4.9 bln

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Fed Chair Powell to speak at Jackson Hole on Friday

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Democratic National Convention gets underway in Chicago

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Indexes up: Dow 0.39%, S&P 500 0.60%, Nasdaq 0.77%

(Updates to 14:08 EDT)

By Stephen Culp

NEW YORK, Aug 19 (Reuters) - U.S. stocks advanced on

Monday, building on their largest weekly percentage gain of the

year as investors focused on the Democratic National Convention

and the Jackson Hole Economic Symposium.

All three major U.S. stock indexes rose, led by the

tech-heavy Nasdaq with help from Nvidia ( NVDA ), Alphabet

and Tesla.

The S&P 500 and the Nasdaq were on track to extend their

winning streak for an eighth consecutive session as equities

continued to rebound from a steep sell-off two weeks ago driven

by recession fears.

"Investors are continuing to breathe a sigh of relief that

the body blow received by the equity markets two weeks ago did

not result in a larger decline," said Sam Stovall, chief

investment strategist of CFRA Research in New York.

Recent data has shown consumer resiliency despite economic

softening, boosting expectations that the Federal Reserve will

start lowering interest rates at its September policy meeting by

cutting the Fed funds target rate by 25 basis points.

"The reason that investors are feeling optimistic once again

is that recent economic reports on inflation, jobs and retail

sales offered reasons, to conclude that the economy remains

resilient," Stovall added. "Inflation continues its downward

glide and the outlook for consumer spending is still

supportive."

A slim majority of economists polled by Reuters say the Fed

will implement three 25-basis-point rate cuts by the end of the

year, and the economy will probably be able to avoid recession

as inflation abates.

The Jackson Hole Economic Symposium kicks off on Thursday,

and Fed Chair Jerome Powell's remarks on Friday will be parsed

for clues regarding the central bank's path from restrictive to

neutral monetary policy.

The Democratic National Convention in Chicago, which starts

on Monday, could fuel market volatility as trading volume drops

in late summer.

The CBOE market volatility index a gauge of investor

anxiety, retreated at a record pace last week from a four-year

high amid growing optimism of a soft landing.

Goldman Sachs lowered the odds of a U.S. recession in the

next 12 months to 20% from 25% following the latest weekly

jobless claims and retail sales reports.

The Dow Jones Industrial Average rose 160.32 points,

or 0.39%, to 40,820.08, the S&P 500 gained 33.6 points,

or 0.60%, at 5,587.85 and the Nasdaq Composite added

136.23 points, or 0.77%, at 17,767.95.

All 11 of the major S&P 500 sectors rose, with communication

services enjoying the biggest percentage gains.

Advanced Micro Devices ( AMD ) rose 3.1% after the chipmaker

said it plans to acquire server maker ZT Systems for $4.9

billion to expand its artificial intelligence portfolio to

better compete with Nvidia ( NVDA ).

B. Riley Financial RILY.O slid 9.1%, extending a drop of

over 65% last week. Co-founder and co-CEO Bryant Riley had

offered to buy the bank on Friday after it warned of a hit from

its investment in Vitamin Shoppe-owner Franchise Group.

Quarterly results from cybersecurity firm Palo Alto Networks ( PANW )

, retailer Target ( TGT ) and home improvement chain

Lowe's are due later this week.

Advancing issues outnumbered decliners on the NYSE by a

3.32-to-1 ratio; on Nasdaq, a 2.30-to-1 ratio favored advancers.

The S&P 500 posted 29 new 52-week highs and no new lows; the

Nasdaq Composite recorded 93 new highs and 49 new lows.