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Gap surges after raising annual sales forecast

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Intuit drops after forecasting Q2 results below estimates

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Small caps touch over one-week high

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Indexes up: Dow 0.79%, S&P 500 0.28%, Nasdaq 0.11%

(Updates for mid-afternoon trading)

By Abigail Summerville and Johann M Cherian

Nov 22 (Reuters) -

All three stock indexes gained on Friday, headed for weekly

gains as investors took comfort from data pointing to robust

economic activity in the world's biggest economy.

A measure of business activity raced to a 31-month high in

November, boosted by hopes for lower interest rates and more

business-friendly policies from President-elect Donald Trump's

administration next year.

The domestically focused small-cap Russell 2000 index

outperformed large-cap indexes with a 1.7% rise. The index hit

its highest in more than a week and was set for weekly advances

of nearly 4%.

Meanwhile, Alphabet lost 1.4%, following

Thursday's 4% drop, as the U.S. Department of Justice argued to

a judge the company was monopolizing online search.

AI bellwether Nvidia ( NVDA ) fell 3.2% on Friday in choppy

trading following its quarterly forecast on Wednesday.

An index tracking S&P 500 value stocks outperformed

with a 0.74% rise as investors rotated out of their growth peers

.

"I've been looking for this leadership change to go from

technology to everything else. I think we may be in the midst of

that shift. Small caps are acting much better, values are acting

better," said Mark Hackett, Chief of Investment Research at

Nationwide.

At 2:00 p.m. ET, the Dow Jones Industrial Average

rose 344.79 points, or 0.79%, to 44,218.78, the S&P 500

gained 16.51 points, or 0.28%, to 5,965.22 and the Nasdaq

Composite gained 20.38 points, or 0.11%, to 18,992.80.

The S&P and the Dow reached one-week highs on Friday.

The S&P 500 communication services sector led

declines with a 0.4% loss. Consumer discretionary stocks

boosted the S&P, rising 1.3%.

Expectations on the Federal Reserve's policy move in

December have recently swayed between a pause and a cut, as

investors weigh the likely impact of Trump's plans on price

pressures.

There is a 59.6% probability the central bank will lower

borrowing costs by 25 basis points, as per the CME Group's

FedWatch Tool.

Geopolitics were top of mind this week as investors

monitored a missile exchange between Ukraine and Russia, after

Moscow lowered its threshold for a nuclear retaliation. The

markets are also awaiting Trump's Treasury Secretary pick.

"The fact that we've been calm on a nice, steady stair step

pattern higher is very encouraging and reflective of the fact

that investors aren't acting with the emotion that they could be

given the amount of uncertainties we've faced," Hackett said.

In company news, Gap Inc ( GAP ) jumped 11% after the Old

Navy parent raised its annual sales forecast and said the

holiday season was off to a "strong start".

Intuit lost 5.3% after the TurboTax parent

projected second-quarter revenue and profit below Wall Street

estimates on Thursday.

Advancing issues outnumbered decliners by a 3.19-to-1 ratio

on the NYSE, and by a 2.43-to-1 ratio on the Nasdaq.

The S&P 500 posted 78 new 52-week highs and no new lows

while the Nasdaq Composite recorded 156 new highs and 69 new

lows.