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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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Alphabet dips after report US mulls Google break-up

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Indexes: Dow up 0.23%, S&P 500 up 0.11%, Nasdaq down 0.19%

(Updated at 11:18 a.m. ET/1518 GMT)

By Medha Singh and Shashwat Chauhan

Aug 14 (Reuters) -

Wall Street's main indexes were mixed on Wednesday, as

Alphabet slid and as signs of moderating inflation kept bets

alive that the U.S. Federal Reserve would begin its policy

easing cycle next month, albeit with a smaller rate cut.

The Google-parent dropped 3.6% after a media

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

options that include breaking up the online search engine.

Losses in Alphabet weighed on the Nasdaq and pulled the

communication services sector down 1.3%, the most

among the 11 major S&P 500 sectors.

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.

Latest

data showed U.S. consumer prices rose moderately in July and

the annual increase in inflation slowed to below 3% for the

first time since early 2021.

"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.

"The pace of magnitude of easing will depend broadly on

incoming data with inflation and employment figures taking on

particular importance."

Money markets now see a 55% chance of a 25-basis point

(bps) rate cut at the Fed's Sept. 17-18 meeting, as per the CME

FedWatch Tool. Before the data, traders were nearly evenly split

between a 25-bps and 50-bps cut.

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.

At 11:18 a.m. ET, the Dow Jones Industrial Average

rose 92.75 points, or 0.23%, to 39,858.60, the S&P 500

gained 6.16 points, or 0.11%, to 5,440.63 and the Nasdaq

Composite lost 29.61 points, or 0.19%, to 17,155.69.

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

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

day at 16.49 after hitting its highest since 2020 just last

week.

AI stocks Nvidia ( NVDA ), Super Micro and Dell

reversed early gains after staging a strong recovery

this week, while most megacap and growth stocks were mixed.

Kellanova ( K ) surged over 7.7% 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 5.2% after the drug

distributor raised its 2025 profit forecast.

TurboTax parent Intuit slipped 1.9% after

Morgan Stanley

downgraded its rating

to "equal-weight" from "overweight".

Advancing issues outnumbered decliners by a 1.25-to-1 ratio

on the NYSE, while declining issues outnumbered advancers by a

1.46-to-1 ratio on the Nasdaq.

The S&P 500 posted 24 new 52-week highs and two new

lows, while the Nasdaq Composite recorded 45 new highs and 92

new lows.