Apple, Tesla lifts stocks to higher close in light pre-holiday trading
Apple, Tesla drove S&P higher
Manufacturing PMI weakens in June
Chewy drops despite Keith Gill's stake disclosure
Indexes up: Dow 0.13%, S&P 0.27%, Nasdaq 0.8%
Updates on 4:10 pm ET/2010 GMT, adds volume
By Saeed Azhar, Ankika Biswas and Lisa Pauline Mattackal
NEW YORK, July 1 (Reuters) - Megacap growth stocks led by Apple and Tesla liftedthe tech-heavy Nasdaq to a higher close on Monday, while the Dow and the S&P 500 also eked out slight gains in light pre-holiday trading.
Investors were waiting for U.S. labor market data due later this week for clues about the interest rate outlook.
Apple AAPL.O climbed 2.9%, Microsoft MSFT.O rose 2% andAmazon.com AMZN.O ended 2.2% higher, boosting the Nasdaq.
"The most important driver of earnings is GDP and the economy still looks very healthy to us," said Ben Snider, a senior equity strategist at Goldman Sachs Research.
"We're forecasting economic growth this year in the U.S. - over trend - above 2%, so underlying revenue growth still looks strong. On top of GDP, profit margins seem to be recovering after a pretty rough couple of years."
A quarter of earnings on the S&P 500 index comes from the largest technology stocks, which also look strong, he said.
Shares of automaker Tesla TSLA.O surged 6.1% ahead of second-quarter vehicle delivery data.
Wells Fargo added Tesla stock to its third-quarter "Tactical Ideas list" yet kept its "underweight" rating and expressed concerns about slowing growth in deliveries and a risk of price cuts.
Shares of semiconductor makersAdvanced Micro Devices AMD.O dropped 2.8% and ArmHoldings ARM.O fell 2.9%, pulling the Philadelphia SE Semiconductor index .SOX close to aone-week low.
Real estate stocks .SPLRCR, also seen as a bond proxy, dropped almost 1%, as U.S. Treasury yields jumped tomulti-week highs. But higher yields often boost bank profits so the S&P 500 banks index .SPXBK jumped to its highest in more than a month.
JP Morgan Chase JPM.N shares were at an all-time high after the biggest U.S. bank on Fridayhiked its dividend to $1.25 a share from $1.15. Its board also authorized $30 billion in share buybacks, effective July 1.
Chewy CHWY.N dropped 6.7%, reversing sharp early gains, after stock influencer Keith Gill, also known as "Roaring Kitty", disclosed a 6.6% stake in the pet products retailer.
Trading volumes were thin, withthe equity market set to shuton Thursday for U.S. Independence Day. Volume on U.S. exchanges was 10.59 billion shares, down from the 11.89 billion average for the full session over the last 20 trading days. Thin volumes were expected all week.
Manufacturing PMI data from the Institute for Supply Management showed manufacturing contracted for a third straight month in June, while prices paid dropped to a six-month low in an encouraging sign for the U.S. Federal Reserve's battle with inflation.
Traders have stuck to their bets of around two interest rate cuts this year, starting from September, LSEG FedWatch showed.
Also scheduled for the week are JOLTS job openings data on Tuesday, and ADP employment, factory orders, ISM services PMI data and minutes of the Fed's latest policy meeting on Wednesday. Non-farm payroll data are due on Friday.
New York Fed President John Williams noted he still believes price pressures are moderating back to the 2% target.
The Dow Jones Industrial Average .DJI rose 50.66 points, or 0.13%, to close at 39,169.52, the S&P 500 .SPX gained 14.61 points, or 0.27%, to 5,475.09 and the Nasdaq Composite .IXIC gained 146.70 points, or 0.83%, to 17,879.30.
Declining issues outnumbered advancers by a 1.87-to-1 ratio on the NYSE. There were 162 new highs and 99 new lows on the NYSE.
The S&P 500 posted 13 new 52-week highs and 4 new lows while the Nasdaq Composite recorded 45 new highs and 157 new lows. On Friday, theNasdaq and the S&P 500 notched their third straight quarterly gains, with the tech-heavy index doing so for the first time in three years. However, the Dow's quarterly decline raised concerns about the need for greater diversification in investor holdings.
Reporting by Saeed Azhar in New York and Ankika Biswas and Lisa Mattackal in Bengaluru; Editing by David Gregorio
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