US STOCKS-Dow outperforms Wall Street in thin trading week

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Merck up after US FDA approves therapy for rare lung condition

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Trump's media firm extends gains after stellar debut

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GameStop faces 'unsustainable' sales decline, shares slide

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Indexes: Dow up 0.59%, S&P up 0.29%, Nasdaq down 0.03%

(Updated at 11:42 a.m. ET/ 1542 GMT)

By Shashwat Chauhan and Bansari Mayur Kamdar

March 27 (Reuters) -

The Dow outpaced Wall Street peers in lean trading on Wednesday, boosted by strong gains in drugmaker Merck, while investors awaited crucial economic data and commentary from the central bank's policymakers with the long holiday weekend approaching.

Merck & Co advanced 3.7% after the U.S. Food and Drug Administration approved its therapy for adults suffering from a rare lung condition.

At current levels, the blue-chip Dow is around 1% shy of the 40,000-point mark, which it has never breached.

Weighing on the tech-heavy Nasdaq, AI giant Nvidia shed 3.1%, leading losses among megacap growth peers.

The Philadelphia Semiconductor Index, however, inched higher, with Marvell Technology among the top gainers, up 4.4%.

Investors looked forward to comments from Fed Board Governor Christopher Waller, who is set to speak at the Economic Club of New York later in the day.

All three major U.S. stock indexes eye quarterly gains as an artificial intelligence-fueled rally helped Wall Street reach record highs recently. Optimism about the Fed cutting borrowing costs later in the year also added to gains.

Traders see a 70% chance the Fed will begin its easing cycle in June, according to the CME FedWatch tool.

The Personal Consumption Expenditures Price Index (PCE), the Fed's preferred inflation gauge, is due on Good Friday, when the U.S. stock market will be closed. An upside surprise to inflation could potentially dampen market enthusiasm around early rate cuts.

Also on tap this week is the final fourth-quarter GDP print, the University of Michigan's reading of consumer sentiment and weekly jobless claims data.

At 11:42 a.m. ET, the Dow Jones Industrial Average was up 231.38 points, or 0.59%, at 39,513.71, the S&P 500 was up 15.24 points, or 0.29%, at 5,218.82, and the Nasdaq Composite was down 5.61 points, or 0.03%, at 16,310.09.

Nine of the 11 major S&P 500 sectors were trading higher, with utilities and real estate leading gains, while information technology lagged.

"We're in a strong bull market... this is kind of a lull in the bull market (today) because there's very few catalysts," said Jay Hatfield, portfolio manager at Infrastructure Capital Advisors in New York.

"What you are seeing is a back-and-forth in buying and alternating between tech and value stocks."

Among individual stocks, Trump Media & Technology Group jumped 17.8%, a day after its stellar Nasdaq debut.

Robinhood Markets climbed 3% after the online trading app launched a new credit card.

Cintas Corp advanced 9.2% after the uniform rental firm raised its forecasts for annual revenue and profit.

GameStop plunged 13.7% after the videogame retailer reported lower fourth-quarter revenue and said it had cut an unspecified number of jobs to reduce costs.

Advancing issues outnumbered decliners by a 3.11-to-1 ratio on the NYSE and by a 2.00-to-1 ratio on the Nasdaq.

The S&P index recorded 38 new 52-week highs and no new lows, while the Nasdaq recorded 69 new highs and 57 new lows. (Reporting by Shashwat Chauhan and Bansari Mayur Kamdar in Bengaluru; Editing by Rashmi Aich and Pooja Desai)