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Kellanova ( K ) jumps after Mars to buy co in $36 bln deal

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U.S. CPI rises as expected in July

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Indexes up: Dow 0.03%, S&P 500 0.08%, Nasdaq 0.11%

(Updated at 9:35 a.m. ET/1335 GMT)

By Medha Singh and Shashwat Chauhan

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

higher in choppy trading on Wednesday after data showed

inflation was moderating as expected, cementing wagers that the

U.S. Federal Reserve was on track to start its policy easing

cycle next month.

Labor Department data showed U.S. consumer prices rose 0.2%

as expected in July, taking the headline inflation to 2.9%

year-on-year from 3% in June, below economists' expectations of

3% growth.

"There is nothing in here that should prevent the Fed from

proceeding with a rate cut in September," said David Doyle, head

of economics at Macquarie.

Bets on a 25-basis point (bps) rate cut in the Fed's

Sept. 17-18 meeting edged up, with traders now seeing a near 59%

chance compared to an even split between a 25-bps and 50-bps

before the data, as per the CME FedWatch Tool.

"We don't know whether it's going to be 25 or 50, but I

don't think inflation's going to determine that. It's going to

be the growth-oriented economic statistics, particularly the

labor statistics and payrolls," said Jack McIntyre, portfolio

manager at Brandywine Global.

Seven of the 11 major S&P 500 sectors were trading higher,

with information technology and financials

leading gains.

Both the S&P 500 and the Nasdaq clocked their

fourth straight session of gains on Tuesday following

softer-than-expected producer prices data that indicated

inflation continued to moderate, although it is yet to reach the

U.S. central bank's 2% target.

A rebound in megacap and technology stocks have helped

markets recoup most of their losses from a global market rout

earlier this month that was partly caused by data showing a

surge in U.S. unemployment rate in July.

At 09:35 a.m. ET, the Dow Jones Industrial Average

rose 10.79 points, or 0.03%, to 39,776.43, the S&P 500

gained 4.15 points, or 0.08%, to 5,438.58 and the Nasdaq

Composite gained 19.38 points, or 0.11%, to 17,206.98.

The Cboe volatility index, Wall Street's fear gauge,

stayed below its long term average of 20 points for the second

day at 17.47 after hitting its highest since 2020 just last

week.

AI stocks Nvidia ( NVDA ), Super Micro and Dell

advanced early on, looking to continue their rally to

the third straight session, while most megacap and growth stocks

edged higher.

Google-parent Alphabet slipped 1.5% after a media

report said the U.S. Department of Justice is considering

options that include breaking up the online search engine.

Kellanova ( K ) surged over 7% after family-owned candy

giant Mars said it would buy the Cheez-It and Pringles maker in

a nearly $36 billion deal.

Cardinal Health ( CAH ) gained 3.5% after the drug

distributor raised its 2025 profit forecast.

TurboTax parent Intuit slipped 1.8% after

Morgan Stanley

downgraded its rating

to "equal-weight" from "overweight".

Advancing issues outnumbered decliners by a 2.09-to-1 ratio

on the NYSE by a 1.37-to-1 ratio on the Nasdaq.

The S&P 500 posted eight new 52-week highs and one new

low, while the Nasdaq Composite recorded 24 new highs and 30 new

lows.