*

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

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Indexes up: Dow 0.59%, S&P 1.19%, Nasdaq 2.09%

(Updates to 2:16 PM ET)

By Chibuike Oguh

NEW YORK, April 26 (Reuters) - U.S. stocks rose 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 10.4% to a record high,

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

Microsoft ( MSFT ) shares rose 2.7% after its third-quarter

revenue and profit exceeded Wall Street estimates, driven by

gains from artificial intelligence (AI) adoption across its

cloud services.

Other megacap growth stocks also traded higher: Amazon.com ( AMZN )

and Nvidia ( NVDA ) rose 3.5% and 5.8%, respectively.

However, Meta Platforms ( META ), Apple ( AAPL ) and Tesla

were down. On Wednesday, Meta results disappointed

investors even as the company ratcheted up spending on AI.

Eight out of the 11 major S&P 500 sectors were trading

higher, led by gains communication services,

technology, consumer discretionary and

materials.

"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.

At 02:16 p.m. the Dow Jones Industrial Average

rose 226.04 points, or 0.59%, to 38,313.61, the S&P 500

gained 59.87 points, or 1.19%, to 5,108.29 and the Nasdaq

Composite gained 325.84 points, or 2.09%, to 15,937.60.

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%.

Shares of Snap surged nearly 28% after the social

media firm beat first-quarter estimates for revenue and user

growth. Pinterest ( PINS ) was also up 4.1%.

Exxon Mobil ( XOM ) lost 2.2% after America's largest oil

company missed analysts' estimates with first-quarter profit

falling 28% from a year ago.

Intel ( INTC ) dropped 9.9% 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.

Advancing issues outnumbered decliners by a 3.04-to-1 ratio

on the NYSE. On the Nasdaq, 2,737 stocks rose and 1,323 fell as

advancing issues outnumbered decliners by a 2.07-to-1 ratio.

The S&P 500 posted 20 new 52-week highs and 8 new lows

while the Nasdaq recorded 50 new highs and 77 new lows.