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Indexes: Dow flat, S&P up 0.02%, Nasdaq up 0.06%

(Updated at 09:40 a.m. ET/ 1340 GMT)

By Bansari Mayur Kamdar and Shristi Achar A

May 17 (Reuters) - Wall Street's main indexes were

largely flat in early trading on Friday as investors took a

breather from the week's rally driven by growing expectations of

U.S. interest-rate cuts this year.

The S&P 500 and Nasdaq were on course for a

fourth straight week of gains, while the blue-chip Dow

was on track for its fifth weekly advance, supported by strong

quarterly results and slowing inflation data that has bolstered

the case for rate cuts from the Federal Reserve.

All three main indexes touched record highs on Thursday and

the Dow briefly crossed the 40,000 milestone, before reversing

gains and closing in the red.

"(Equities) are just trying to sort of digest the past

week's economic data," said Robert Pavlik, senior portfolio

manager at Dakota Wealth.

"People are now looking at the next catalyst. Most likely

it's going to be whether or not the Fed actually cuts. So you

got PCE (personal consumption expenditures) coming up, and if

that's below expectations then probably see the market continue

to trend higher."

Investors will parse comments from Fed officials Christopher

Waller and Mary Daly, expected to speak during the day, for

further cues on the central bank's monetary policy path.

Traders currently see a 68% chance of the first rate cut in

September, according to the CME FedWatch Tool.

Of the 11 S&P 500 sectors, utilities

underperformed other sectors with a 0.3% fall, while energy

shares led gains, up 0.3%

At 09:40 a.m. ET, the Dow Jones Industrial Average

rose 0.10 points to 39,869.48, the S&P 500 gained 1.27

points, or 0.02%, to 5,298.37 and the Nasdaq Composite

gained 10.58 points, or 0.06%, to 16,708.90.

Advanced Micro Devices ( AMD ) gained 3.4% after Microsoft ( MSFT )

said it plans to offer its cloud computing customers a

platform of AMD artificial intelligence chips that will compete

with components made by Nvidia ( NVDA ).

Reddit ( RDDT ) rose 13% on partnering with OpenAI to bring

its content to ChatGPT.

GameStop ( GME ) shed 24.1% after filing for a mixed-shelf

offering and saying it expects first-quarter net sales to drop

from a year ago.

The stock is still set for sharp weekly gains, along with

fellow retail investor darling AMC Entertainment ( AMC ), on

excitement over the social media return of "Roaring Kitty", who

was the central figure in the 2021 meme-stock rally.

Advancing issues outnumbered decliners by a 1.11-to-1 ratio

on the NYSE. Declining issues outnumbered advancers by a

1.13-to-1 ratio on the Nasdaq.

The S&P 500 posted 17 new 52-week highs and one new low,

while the Nasdaq recorded 47 new highs and 20 new lows.

(Reporting by Bansari Mayur Kamdar and Shristi Achar A in

Bengaluru; Editing by Varun H K and Devika Syamnath)