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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

(Updates to close)

By David French

Aug 14 (Reuters) - The S&P 500 closed higher on

Wednesday, stretching its winning streak to five sessions, as

the latest inflation data reassured investors betting the

Federal Reserve would start cutting U.S. interest rates next

month.

However, Alphabet and some megacap tech stocks traded

lower, which weighed on the Nasdaq composite, which finished

close to unchanged.

Moves were generally subdued though, with many investors

away for August vacations, and new triggers for trading were

absent, contributing to an overall listless picture among the

benchmarks.

The latest U.S. consumer price data, released earlier on

Wednesday, offered little for anyone seeking divergence from the

expected path to a September start to interest rate cuts.

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.

Coming the day after softer-than-expected producer

prices data indicated inflation continued to moderate, although

not yet all the way to the U.S. central bank's 2% target,

supported the view inflation was being tamed.

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.

Scott Ladner, chief investment officer at Horizon

Investments, said he called days such as this "markets violently

going nowhere", adding with CPI painting a similar picture to

PPI data, there was no reason for traders to reassess moves put

in place on the previous day.

"There's no huge rationale to move prices one way or

another," he said.

Unofficially, the S&P 500 closed at 5,455.21, up 0.38%

or 20.78 points. The Nasdaq composite closed at

17,192.60, up 0.03% or 4.99 points. The Dow Jones Industrial

Average closed up 242.75 points or 0.61% at 40,008.39.

Shares of Alphabet, the Google-parent, dropped

on a media report that the U.S. Department of Justice is

considering options that include breaking up the online search

engine.

Other megacaps were mixed: Tesla and Meta Platforms ( META )

dropped, while Microsoft ( MSFT ) and Nvidia ( NVDA ) rose.

A rebound in megacap and tech stocks has helped markets

recoup most losses from a global market rout early this month

after data showed the U.S. unemployment rate surged in July.

Thursday's release by the Commerce Department's Census

Bureau of retail sales data will be keenly watched by those

concerned about the overall strength of the American economy,

Horizon's Ladner said.

These worries had sent the Cboe volatility index,

Wall Street's fear gauge, to its highest since 2020 just last

week. However, on Wednesday, it stayed below its long term

average of 20 points for the second day.

A majority of the major S&P sectors were in positive

territory, led by a rise in financials. Its advance was

aided by gains by Progressive and Charles Schwab ( SCHW )

, which rose after positive July performance numbers,

and Allstate ( ALL ), which climbed after agreeing to sell a

business unit.

Kellanova ( K ) surged 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 after the drug distributor

raised its 2025 profit forecast.