US STOCKS-S&P 500, Nasdaq advance as investors await key economic data

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Indexes: Dow down 0.05%, S&P 500 up 0.5%, Nasdaq up 0.9%

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S&P 500's software services index gains over 2%

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Kroger (KR) jumps after naming ex-Walmart executive as CEO

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Nonfarm payrolls, inflation data due later in the week

(Updates with analyst comment, prices)

By Twesha Dikshit and Nikhil Sharma

Feb 9 (Reuters) - The S&P 500 and the Nasdaq gained after a shaky start on Monday, finding their footing following last week's AI-sparked tech rout, while investors ?focused on key economic data that could shed light on the Federal Reserve's interest-rate path.

Software companies clawed back losses after a bruising week in which fears that rapidly progressing AI ?could intensify competition and squeeze margins sent them tumbling. The S&P 500 Software Services index gained 2.4% on the day.

ServiceNow (NOW) ?rose 2.1%, while Salesforce (CRM) and CrowdStrike (CRWD) gained 1.6% each.

The Dow hit an intraday record high, ?after surpassing 50,000 points for the ?first time on Friday, supported by a rotation into other pockets of the market. The small-cap Russell 2000 index gained 0.8%

The Nasdaq was about 3.1% away from ?its peak in October end, while the S&P 500 was 0.5% shy ?of its all-time high in January.

But caution lingered as investors were still uneasy over Big Tech's ambitious capital expenditure plans. Amazon (AMZN), Alphabet, Meta and Microsoft (MSFT) together are poised to spend around $650 billion in the race ?to dominate AI.

"It's an eye-popping number, $650 billion... and that's not something ?that investors are ?used to," said Anna Rathbun, founder and CEO of Grenadilla Advisory.

"There was already fatigue of being surprised on the upside for AI investment when we were coming into this year, so this is investors not being used ?to such a high ticket price for AI investment and also being wary where the return from these investments are going to come from."

At 11:18 a.m. ET, the Dow Jones Industrial Average fell 24.30 points, or 0.05%, to 50,091.37. The S&P 500 gained 33.68 points, or 0.49%, to 6,965.98, while the Nasdaq Composite advanced 211.97 points, or 0.92%, to 23,243.19.

The S&P 500 technology index and the Philadelphia SE Semiconductor index were up around 1.5% each.

The next big test for AI-related stocks will be chip giant Nvidia's (NVDA) ?earnings later ?this month, with investors increasingly demanding measurable gains from capex plans. Nvidia (NVDA) rose 3.4%.

Investors will also monitor the January nonfarm payrolls report due on Wednesday, which was delayed by a partial government shutdown, and the closely watched January Consumer Price ?Index on Friday.

Markets are currently pricing in the year's first interest-rate cut in June, according to CME Group's FedWatch tool, which could be when U.S. President Donald Trump's nominee for Fed chair, Kevin Warsh, takes over.

Investors will tune into the comments from Fed members Christopher Waller, Stephen Miran and Raphael Bostic through the day.

Among stock movers, Hims & Hers Health (HIMS) sank 24%. Novo Nordisk sued the telehealth firm for patent infringement after the U.S. firm launched, then canceled, a $49 copy of the Danish drugmaker's weight-loss pill Wegovy following backlash from the U.S. Food and Drug Administration.

Workday slid ?6.8% after the human resources software provider announced co-founder Aneel Bhusri will return as its CEO.

Apollo Global Management (APO) rose 2.2% after the asset manager reported a 13% rise in fourth-quarter profit.

Kyndryl (KD) slumped 55% after the IT services provider delayed its quarterly filing and flagged material weakness in its financial reporting.

Kroger's (KR) shares added 6.3% after ?the grocery giant named former Walmart executive Greg Foran as its CEO. (Reporting by Twesha Dikshit; Editing by Pooja Desai and Shilpi Majumdar)