US STOCKS-Nasdaq surges on megacap earnings but U.S. fiscal uncertainty nags

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* Apple briefly becomes world's most valuable public company
* Caterpillar among biggest drags on Dow

(Adds Kansas City Southern, trading volume)
By Chuck Mikolajczak
NEW YORK, July 31 (Reuters) - The Nasdaq jumped more than 1%
on Friday, powered by strong earnings from some of the largest
U.S. companies, but the Dow and S&P finished with smaller gains
as uncertainty about the government's next round of coronavirus
aid kept economic worries on the radar.
Apple Inc AAPL.O shares surged 10.5% to close at a record
$425.04 in the wake of blowout quarterly results and a
four-for-one stock split announcement. Amazon.com Inc AMZN.O gained 3.7% after posting its
biggest profit ever while Facebook jumped 8.2% after the social
media platform blew past revenue expectations. Google parent Alphabet Inc GOOGL.O fell 3.3% though, the
biggest drag on the S&P 500 and Nasdaq, as it posted the first
quarterly sales dip in its 16 years as a public company.
"The results were just fabulous, just so strong," said Tim
Ghriskey, Chief Investment Strategist at Inverness Counsel in
New York. "These are extremely profitable companies and they
produce products that people want."
The four companies are among the top five in market
capitalization, representing roughly 20% of the S&P 500's total.
Apple's gain pushed it ahead of Saudi Aramco 2222.SE as the
world's most valuable public company, according to Refinitiv
data. White House and Democrats were still negotiating on
coronavirus relief aid, but not yet on a path toward reaching a
deal, according to House of Representatives Speaker Nancy
Pelosi, hours before the expiration of a federal unemployment
benefit. "It seems like they are far apart and supposedly they are
working at it and there is a lot of name calling and as usual
there is a lot of bad blood between these two parties and they
have to come to some compromise, clearly, but they are not
there, that's for sure," said Ghriskey.
The Dow Jones Industrial Average .DJI rose 114.67 points,
or 0.44%, to 26,428.32, the S&P 500 .SPX gained 24.9 points,
or 0.77%, to 3,271.12 and the Nasdaq Composite .IXIC added
157.46 points, or 1.49%, to 10,745.28.
It was a choppy session with each major index up and down.
The Dow at one point fell more than 1%. In late trade, stocks
moved higher into the close as Microsoft shares pared losses of
more than 2% after reports the company was said to be in talks
to buy video app TikTok. Kansas City Southern KSU.N also provided a late boost,
ending the session 9.7% higher after the Wall Street Journal
reported a group of buyout investors were considering a takeover
bid for the rail operator. U.S. deaths from COVID-19 appeared to be rising at their
fastest rate since early June, and the Midwest looked like the
current epicenter of the pandemic. The benchmark index is now about 3.4% shy of its February
all-time high, but faltering macroeconomic data and rising
COVID-19 cases in the United States were making investors
cautious again.
Still, the S&P notched its fourth weekly gain in the past
five and fourth straight month of gains, with lift from massive
fiscal and monetary stimulus measures to buttress the U.S.
economy during the pandemic.
For the week, the S&P gained 1.73%, the Dow shed 0.15% and
the Nasdaq climbed 3.69%. For the month, the S&P rose 5.52%, the
Dow advanced 2.39% and the Nasdaq rallied 6.83%.
Energy stocks .SPNY were the worst performing among the 11
major S&P sectors after Chevron Corp CVX.N reported an $8.3
billion loss on asset writedowns and ExxonMobil Corp XOM.N
recorded a second consecutive quarterly loss. Caterpillar Inc CAT.N fell 2.8% after the bellwether for
economic activity offered little signs of improvement in
equipment sales. Declining issues outnumbered advancing ones on the NYSE by a
1.40-to-1 ratio; on Nasdaq, a 1.94-to-1 ratio favored decliners.
The S&P 500 posted 30 new 52-week highs and no new lows; the
Nasdaq Composite recorded 104 new highs and 22 new lows.
About 11.01 billion shares changed hands in U.S. exchanges,
compared with the 10.53 billion daily average over the last 20
sessions.

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