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S&P 500, Nasdaq hit record highs on megacaps, earnings strength

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July 23 (Reuters) - The S&P 500 and Nasdaq indexes hit record highs on Friday and were on track to end the week with gains, helped by megacap growth stocks and strong earnings from social media companies, while a weak forecast from Intel hit chipmakers.

Twitter Inc (TWTR.N) gained 4.2% after it reported quarterly revenue growth, while Snapchat-owner Snap Inc (SNAP.N) surged 22.5% on beating estimates for user growth and revenue. read more

Strong results from the social media firms set a positive precedent for Facebook Inc (FB.O), which jumped 6.7%.

Other growth firms including Amazon.com (AMZN.O), Apple Inc (AAPL.O), Microsoft Corp (MSFT.O) and Google-owner Alphabet Inc (GOOGL.O) rose ahead of their quarterly results next week.

Technology (.SPLRCT) and communication services (.SPLRCL), whichhouse some of those big tech heavyweights, added 0.9% and 2.5% respectively,and were among the top gaining S&P sectors.

The major indexes were set for their fourth weekly gain in five weeks on a boost from positive earnings reports, while the Nasdaq 100 index (.NDX) breached 15,000 points for the first time.

"The tech earnings will be phenomenal ... I'm not sure that they're going to be market leaders, they will be earnings leaders," said George Ball, chairman at Sanders Morris Harris in Houston, Texas.

"The key is, what happens next. You're going to be comparing to a higher base than previously and in the third and fourth quarters, we'll be looking backward to a largely post-COVID level of earnings, and so the increases will not be as large."

American Express Co (AXP.N)gained 2.6% and was the top boost to the S&P 500 financials sector (.SPSY) after its second-quarter profit blew past expectations. read more

Intel Corp (INTC.O)slid 5.8%, leading the declines on the Philadelphia SE Semiconductor index (.SOX), after it gave an annual sales forecast that implied a weak end of the year. read more

The second-quarter earnings season barreled ahead, with 120 companies in the S&P 500 having reported numbers so far. Of those, 88.3% have beaten consensus estimates, according to Refinitiv data.

Wall Street investors have shifted between growth stocks and economically sensitive value shares this week, after concerns about the spread of the Delta coronavirus variant roiled markets and sparked a flight to the perceived safety of bond markets on Monday.

Meanwhile, data from IHS Markit showed business activity grew at a moderate pace for a second straight month in July amid supply constraints. read more

The Federal Reserve's policy meeting next week will be closely watched for further hints about tapering amid a spike in COVID-19 cases, though Chair Jerome Powell has repeatedly said the labor market remains well short of its target. read more

At 11:59 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 176.87 points, or 0.51%, at 35,000.22, the S&P 500 (.SPX) was up 33.53 points, or 0.77%, at 4,401.01 and the Nasdaq Composite (.IXIC) was up 117.09 points, or 0.80%, at 14,801.69.

Advancing issues outnumbered decliners by a 1.26-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.28-to-1 ratio on the Nasdaq.

The S&P index recorded 73 new 52-week highs and no new low, while the Nasdaq recorded 74 new highs and 119 new lows.

Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; editing by Uttaresh.V and Maju Samuel
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