US STOCKS-S&P 500 muted as stimulus deal remains elusive

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* Applied Materials Inc rises on strong Q4 outlook
* Retail sales rise 1.2% in July vs 7.5% gain in June
* CureVac shares nearly triple in Nasdaq debut
* Indexes: Dow up 0.15%, S&P rises 0.12%, Nasdaq flat

(Updates to midday)
By Ambar Warrick and Medha Singh
Aug 14 (Reuters) - Trading on Wall Street was subdued on
Friday as doubts crept in about a new U.S. stimulus bill, while
the S&P 500 hovered below record highs as a swathe of domestic
data showed the economy was still smarting from the COVID-19
pandemic.
Aggressive stimulus measures have helped the three main U.S.
stock indexes bounce from a coronavirus-driven crash in March,
and the S&P 500 briefly traded above its Feb. 19 record close
for a second straight day on Thursday.
Although the benchmark index was set to rise for a third
straight week, it has struggled to top its all-time high as
prospects of more fiscal aid faded with the Senate and House of
Representatives in recess and no fresh talks scheduled.
"A lot of the economic data points that we will see in the
next 2-3 months are definitely going to hinge on not having a
stalemate in talks," said David Wagner, portfolio manager and
analyst at Aptus Capital Advisors in Cincinnati, Ohio.
Data on Friday showed U.S. retail sales increased less than
expected last month and could slow further due to spiraling
COVID-19 cases and a reduction in unemployment benefit
checks. Separately, readings showed that U.S. factory output
increased more than expected in July, but remained below
pre-pandemic levels while consumer sentiment was largely steady
in the first half of August. "We still have a long way to go (in terms of an economic
recovery) and income support is the way to power the consumer
through. If we get strong retail sales data over the next two
months, given the lack of recent government action, it should be
very positive," Aptus Capital's Wagner added.
Uncertainty over the timing of a stimulus agreement has
undercut sentiment in recent sessions, with the upcoming U.S.
presidential elections expected to add another layer of caution.
At 12:42 p.m. ET, the Dow Jones Industrial Average .DJI
was up 40.89 points, or 0.15%, at 27,937.61 and the S&P 500
.SPX was up 4.06 points, or 0.12%, at 3,377.49. The Nasdaq
Composite .IXIC was down 5.80 points, or 0.05%, at 11,036.70.
Technology .SPLRCT , which has been the best performing
sector through the pandemic, led declines among the 11 major S&P
indexes, while financials .SPSY and industrials .SPLRCI
outperformed.
Shares of German biotechnology firm CureVac BV CVAC.O
nearly tripled in their Nasdaq debut, marking the first stock
market debut of a company developing a potential vaccine for the
novel coronavirus. L4N2FG3OM
Applied Materials Inc AMAT.O gained 4.4% after it forecast
fourth-quarter revenue above analysts' estimates following a
rebound in demand for chip equipment and services. Advancing issues outnumbered decliners by a 1.13-to-1 ratio
on the NYSE. Declining issues outnumbered advancers for a
1.21-to-1 ratio on the Nasdaq.
The S&P index recorded 15 new 52-week highs and no new low,
while the Nasdaq recorded 39 new highs and seven new lows.