By Tanya Agrawal
(Reuters) - Dealmaking in the chip sector lifted the Nasdaq to a new intraday high on Monday but losses in the telecom sector after the collapse of merger talks between Sprint and T-Mobile weighed on the S&P and the Dow.
Shares of Qualcomm <QCOM.O> rose as much as 5.7 percent before paring some gains and were the second biggest boost to the tech-heavy index after Broadcom <AVGO.O> offered to buy the smartphone chip supplier in what could be the biggest merger in the tech sector. Broadcom was off 0.6 percent.
"The fact that the deal is on the table is huge," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
"We have not seen much in the way of dealmaking this year. So this might jumpstart some of the dealmaking ahead of the tax policy changes."
Shares of Sprint <S.N> fell as much as 14.2 percent to more-than-a-year low after the wireless provider and T-Mobile <TMUS.O> called off a planned merger. T-Mobile was down 6.1 percent.
The telecommunications sector <.SPLRCL> led the decliners among the major S&P sectors, with a 3.29 percent fall. Verizon's <VZ.N> 4.7 percent fall weighed the most on the S&P and the Dow.
At 12:29 p.m. ET (1629 GMT), the Dow Jones Industrial Average <.DJI> was up 3.75 points, or 0.02 percent, at 23,542.94, the S&P 500 <.SPX> was up 1.7 points, or 0.06 percent, at 2,589.54.
The Nasdaq Composite <.IXIC> was up 14.95 points, or 0.22 percent, at 6,779.39.
Energy sector <.SPNY> rose 1.83 percent on gains in crude prices after the crown price of Saudi Arabia, the world's largest oil exporter, tightened grip on power through an anti-corruption purge.
U.S. companies continue to report their quarterly earnings. With more than 400 of S&P 500 companies having reported, earnings for the third quarter are expected to have climbed 8 percent, compared to an expectation of a 5.9 percent rise at the start of October, according to Thomson Reuters I/B/E/S.
Investors are taking a breather after a busy week that included the unveiling of the Republican tax overhaul bill and the nomination of Federal Reserve Governor Jerome Powell as the new Fed Chair.
Michael Kors <KORS.N> jumped 15.5 percent after the fashion accessories maker raised its 2017 revenue forecast. The stock was the biggest percentage gainer on the S&P.
Advanced Micro Devices <AMD.O> rose 5.2 percent on a report that it plans to team up with Intel <INTC.O> to form a personal computer chip unit. Intel was down marginally.
Advancing issues outnumbered decliners on the NYSE by 1,580 to 1,244. On the Nasdaq, 1,505 issues rose and 1,320 fell.
(Reporting by Tanya Agrawal; Editing by Arun Koyyur)