(Updates to market open)

* Indexes: Dow down 0.04%, S&P 500 up 0.11%, Nasdaq up 0.07%

* July retail sales unexpectedly fall

* Reddit soars on S&P 500 inclusion announcement

* Drone makers gain after Trump plans tariffs on drone,

component imports

By Avinash P and Purvi Agarwal

Aug 14 (Reuters) - Wall Street's main indexes were largely

muted in choppy trading on Friday, a day after the S&P 500

closed at a record high, while investors assessed retail sales

data and took stock of the latest developments in the Middle

East.

Gains in Meta Platforms ( META ) and Alphabet

lifted the S&P 500 communication services index 0.5%,

but mixed moves in chip stocks such as Broadcom ( AVGO ) and

Nvidia ( NVDA ) left the S&P 500 and the Nasdaq swinging between

gains and losses.

Applied Materials ( AMAT ) fell 4%, even after the chip

equipment maker forecast fourth-quarter revenue above Wall

Street estimates.

Energy stocks on the S&P 500 rose 1.6%, while miners

and industrials gained about 0.5% each.

"It's good to see an expansion in the markets here with

broadening out, not just hiding out in hyperscalers like

Microsoft and Nvidia ( NVDA )," said Bob Lang, founder and chief

strategist at Explosive Options.

Declines in Amgen ( AMGN ) and Johnson & Johnson ( JNJ )

weighed on the Dow.

At 10:05 a.m. ET, the Dow Jones Industrial Average fell

21.14 points, or 0.04%, to 53,818.85, the S&P 500 gained

8.66 points, or 0.11%, to 7,807.65 and the Nasdaq Composite

gained 17.78 points, or 0.07%, to 26,822.61.

Investors also parsed a weaker-than-expected retail sales

reading for July, after an unrevised 0.2% gain in June, the

Commerce Department's Census Bureau said.

"If they (the Fed) raise rates at the next meeting, it's not

going to be a horrible thing ... If they do not change policy,

it means that they have confidence that inflation trends are

moving in the right direction," said Lang.

The figures follow benign inflation data earlier this week that

eased some concerns about a Federal Reserve interest-rate hike

in September, putting the S&P 500 and the Nasdaq on track for a

third consecutive weekly gain, their longest winning streak

since early April.

The University of Michigan's preliminary consumer sentiment

survey came in at 51 in August, below expectations of 54.5,

according to economists polled by Reuters.

Developments in the Middle East continued to weigh on investor

sentiment after transit through the Strait of Hormuz appeared to

have come to a near standstill after two more ships were

attacked and the U.S. said it could maintain a naval blockade of

Iran indefinitely.

Among other stocks, Workday slipped 4.4%. Reuters

reported on Thursday that private equity firm Silver Lake was in

talks to acquire the software firm.

Reddit surged nearly 15% after the social media

companywas named a new addition to the S&P 500 index, effective

August 18.

Shares of some drone makers gained after President Donald Trump

said late on Thursday that he would impose tariffs on imports of

drones and their components.

Red Cat ( RCAT ) jumped 7% and Unusual Machines ( UMAC ) added

14%.

Advancing issues outnumbered decliners by a 1.45-to-1 ratio on

the NYSE and by a 1.02-to-1 ratio on the Nasdaq.

The S&P 500 posted nine new 52-week highs and one new low while

the Nasdaq Composite recorded 49 new highs and 32 new lows.

(Reporting by Avinash P and Purvi Agarwal in Bengaluru; Editing

by Tasim Zahid and Anil D'Silva)