*

March PCE data in line with estimates

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Alphabet jumps on first-ever dividend, $70 bln buyback

plan

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Microsoft ( MSFT ) gains after earnings beat estimates

(Updates prices, market activity and comments to close)

By Chibuike Oguh

NEW YORK, April 26 (Reuters) - U.S. stocks closed higher

on Friday, buoyed by a rally in megacap growth stocks following

robust quarterly results from technology heavyweights Alphabet

and Microsoft ( MSFT ) in addition to moderate

inflation data.

Investors cheered Alphabet's first-ever dividend, its $70

billion stock buyback program, and better-than-expected

first-quarter results. Its shares jumped to a record high,

lifting the Google-parent's market value above $2 trillion.

Microsoft ( MSFT ) shares rose after its third-quarter

revenue and profit exceeded Wall Street estimates, driven by

gains from artificial intelligence (AI) adoption across its

cloud services. On Wednesday, Meta results had

disappointed investors even as the company ratcheted up spending

on AI.

"The earnings reports of Microsoft ( MSFT ) and Google allayed a lot

of the concerns about the fact that the spending on data centers

and AI, which Meta had raised a day before, was going to

compress margins," said Tom Plumb, president and lead portfolio

manager at Plumb Funds in Madison, Wisconsin.

"Both Google and Microsoft ( MSFT ) had indicated that with their

current capital plans, they still expected their margins to

expand. That allayed a lot of the fears that people had about

the growth of data computing," Plumb added.

U.S. Commerce Department data showed monthly inflation rose

moderately in March on an annual basis while coming in line with

estimates on a monthly basis.

The report offered some relief to financial markets spooked

by worries of stagflation a day after data showed inflation

surging and economic growth slowing in the first quarter.

After the data, money markets priced in a firmer chance of a

Federal Reserve rate cut in September. The yield on the

benchmark 10-year Treasury note fell after the data,

last standing at 4.6692%.

According to preliminary data, the S&P 500

gained 50.27 points, or 1.00%, to end at 5,098.69 points,

while the Nasdaq Composite gained 311.00 points, or

1.99%, to 15,922.76. The Dow Jones Industrial Average

rose 151.37 points, or 0.40%, to 38,237.17.

Shares of Snap surged after the social media firm

beat first-quarter estimates for revenue and user growth.

Pinterest ( PINS ) shares also finished higher.

Exxon Mobil ( XOM ) lost ground after America's largest oil

company missed analysts' estimates with first-quarter profit

falling 28% from a year ago.

Intel ( INTC ) dropped after the chipmaker's forecast for

second-quarter revenue and profit did not meet estimates. Intel ( INTC )

faces weak demand for its traditional data center and PC chips.