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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

(Updates to market close)

By Stephen Culp

NEW YORK, Aug 19 (Reuters) - U.S. stocks closed firmer

on Monday, building on their largest weekly percentage gain of

the year as investors focused on the Democratic National

Convention and the upcoming Jackson Hole Economic Symposium.

All three major U.S. stock indexes closed higher, with the

S&P 500 and the Nasdaq extending their winning streak to eight

consecutive sessions as equities continued to rebound from a

steep sell-off two weeks ago driven by recession fears.

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.

"What's behind (this rally) is the hope that the spigots

will continue to be open with the Fed potentially cutting rates

in September," said Paul Nolte, senior wealth advisor & market

strategist at Murphy & Sylvest in Elmhurst, Illinois.

"Money is looking for a place to go, and it's going into

the equity markets."

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 U.S. central bank's path from

restrictive to neutral monetary policy.

"I think (Powell) is going to reiterate some of the talking

points that the Fed made, that they're getting a little bit more

comfortable with the fact that inflation is coming down to

target," Nolte added. "They're comfortable with the economy

doing reasonably well, and that will be interpreted by the

markets as a door-opener for a September rate cut."

The Democratic National Convention in Chicago, which starts

on Monday, could fuel market volatility that is already

heightened due to light, late-summer trading volume.

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.

According to preliminary data, the S&P 500

gained 54.05 points, or 0.97%, to end at 5,608.30 points,

while the Nasdaq Composite gained 245.05 points, or

1.39%, to 17,876.77. The Dow Jones Industrial Average

rose 232.57 points, or 0.57%, to 40,892.33.

Advanced Micro Devices ( AMD ) rose 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 extended its 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.