(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window.)
*
News Corp up as quarterly profit tops estimates
*
US-listed China stocks fall as stimulus measures disappoint
*
US consumer sentiment dips in August
*
July annual PPI 0.8% vs estimates of 0.7%
*
Indexes mixed : Dow up 0.21%, S&P down 0.16%, Nasdaq down 0.55%
(Updates at 2:08 p.m. ET/ 1808 GMT)
By Bansari Mayur Kamdar and David French
Aug 11 (Reuters) - The S&P 500 and Nasdaq dropped on Friday, heading for another weekly decline after hotter-than-expected U.S. producer prices data pushed Treasury yields higher and sank rate-sensitive megacap growth stocks, which weighed on the benchmark indexes.
The U.S. producer price index (PPI) climbed 0.8% in the 12 months leading to July, up from a 0.2% rise in the previous month, as costs of services increased. Economists polled by Refinitiv had expected a 0.7% gain.
Though traders broadly expect the Federal Reserve to refrain from tightening credit conditions for the rest of the year, bets for no rate hike in September slipped to 88.5% from 90% before the data landed.
"The PPI data shows that the inflation monster is still lingering but investors can see progress in the things that come under CPI," said David Russell, vice president of market intelligence at TradeStation.
Yield on the two-year treasury note, that moves in line with near-term interest rate expectations, climbed to 4.88%. Tesla, Alphabet Inc and Microsoft shares lost between 0.4% and 1.1%.
A 3.2% fall in Nvidia weighed on the semiconductor index, which was 2.2% lower, on course for its fourth straight decline and its eighth loss in nine sessions.
A close for the semis index, at its current level, would also mark the SOX's biggest weekly loss since early April.
Megacap growth and technology stocks have led outsized gains this year in the tech-heavy Nasdaq and the S&P 500 . The indexes were on track to end lower for a second straight week.
At 2:08 p.m. ET, the Dow Jones Industrial Average rose 73.28 points, or 0.21%, to 35,249.43, the S&P 500 lost 7.04 points, or 0.16%, to 4,461.79 and the Nasdaq Composite dropped 75.39 points, or 0.55%, to 13,645.64.
U.S. consumer sentiment dipped in August, yet Americans were optimistic that inflation will edge lower over the next year and beyond, according to a preliminary reading of a University of Michigan survey.
Amid the major S&P sectors, healthcare and energy sectors advanced. Both have been among the worst performing industries this year, although energy was on course to match its strongest run this year of closing higher for seven straight sessions.
"The market is seeing some healthy rotation, with money moving away from the large growth names into other sectors that were real laggards for a lot of the year," Russell added.
Among other movers, News Corp rose 4.4% after the Rupert Murdoch-owned media conglomerate beat quarterly profit estimates, thanks to its cost-cutting efforts.
U.S.-listed shares of Chinese companies Alibaba and JD.com fell 3.9% and 6.1%, respectively, as Beijing's latest stimulus measures disappointed investors, while fresh data showed that the country's post-pandemic recovery was losing steam.
(Reporting by Bansari Mayur Kamdar and Johann M Cherian in Bengaluru and David French in New York; Additional reporting by Shashwat Chauhan; Editing by Vinay Dwivedi and David Gregorio)
