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* S&P, Dow hit record highs for second straight session
* AT&T among top boosts to S&P 500
* Tech, media sectors overhaul to take effect Monday
* Micron warns tariffs to impact results; Chipmakers slip
* Indexes: Dow up 0.29 pct, S&P up 0.13 pct; Nasdaq off 0.16 pct (Adds comments, updates to early afternoon)
By Shreyashi Sanyal
Sept 21 (Reuters) - The S&P 500 and the Dow touched record highs for the second straight day, while the tech-heavy Nasdaq dipped in heavy trading on Friday, largely related to Wall Street's sector reshuffling and "quadruple witching" expirations.
Telecoms major AT&T was set to form the heart of a new powerhouse communications services sector, which would also include Facebook, Google parent Alphabet and Twitter.
AT&T rose 1.8 percent, pushing the S&P telecommunications sector higher by 1.42 percent. Shares of Verizon climbed 1.1 percent and CenturyLink gained 1.6 percent.
"The communications sector will be a more widely-held, widely-traded and widely-followed sector and investors will have to take on more exposure to names like Verizon and AT&T, which have been under-owned," said Yousef Abbasi, global market strategist at INTL FCStone in New York.
Eight of the 11 major S&P sectors were higher, with the telecommunications sector gaining the most.
Technology stocks, however, handed back an early burst of gains after the opening bell, with traders pointing to fallout from the biggest reshuffle since 1999 of Wall Street's broad industry sectors as a driving factor.
Many of the companies that have powered the tech rally are being reclassified in the overhaul that takes effect on Monday and may demand a substantial reorganization of holdings by big institutional investors.
With the S&P's quarterly rebalancing of its indexes also playing in, the Nasdaq dipped, with Apple and Amazon.com down 0.3 percent and 0.7 percent respectively.
"The 'quad-witch' along with the sector reclassification will have an impact on names like Facebook and the overall tech-heavy Nasdaq," Abbasi said.
At 13:06 p.m. ET the Dow Jones Industrial Average was up 76.89 points, or 0.29 percent, at 26,733.87, the S&P 500 was up 3.91 points, or 0.13 percent, at 2,934.66.
Apple will remain in the tech sector, where it will account for 20 percent of the index's market capitalization, while Amazon will remain a consumer discretionary firm.
McDonald's 2 percent rise lifted the consumer discretionary sector after the company ended a week marked by strikes across the country over workplace sexual harassment by raising its quarterly dividend by 15 percent to $1.16.
A 3 percent drop in shares of Micron led chipmakers lower after the Idaho-based firm said U.S. tariffs on Chinese goods would weigh on its financial results for as much as a year.
Trade concerns have moved into the background since Tuesday's latest blows in the conflict with China, allowing the resumption of a rally that dates back a decade.
Advancing issues outnumbered decliners by a 1.27-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.18-to-1 ratio on the Nasdaq.
The S&P index recorded 53 new 52-week highs and no new lows, while the Nasdaq recorded no new highs and no new lows. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur)