* U.S. business activity inches up in June

* Spirit Aero up following report of Boeing nearing buyout deal

* Sarepta surges on expanded use of gene therapy

* Indexes mixed: Dow up 0.07%, S&P down 0.13%, Nasdaq down 0.16%

June 21 (Reuters) - The S&P 500 and Nasdaq dipped slightly on Friday as shares of Nvidia fell for a second consecutive day, pulling the tech sector lower.

Megacaps Microsoft, Alphabet, Amazon.com and Apple rose between 0.07% and 2.08%.

Communication services was the biggest gainers among the 11 S&P 500 sector indexes, up 0.72%, while technology led the decline.

“We've had a very strong run, especially in the S&P over the last couple weeks. So not surprised to see things kind of take a pause and settle down,” Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina.

All the three major Wall Street indexes were on track to post weekly gains, with the S&P 500 briefly crossing the 5,500-point milestone during Thursday's session.

Friday's trading could be more volatile than usual due to triple witching, the simultaneous expiration of stock options, stock index options, and stock index futures.

U.S. business activity reached a 26-month high in June amid a rebound in employment, while easing price pressures suggested the recent inflation slowdown may continue.

Flash services PMI increased to 55.1 this month, above expectations of 53.7, while manufacturing PMI edged up to 51.7, compared with expectations of a dip to 51.

May home sales fell to a seasonally adjusted annual rate of 4.11 million units versus expectations of 4.10 million units.

Money markets are still pricing in a 58% chance of a 25-basis point rate cut in September, and still expect about two rate cuts this year, according to LSEG's FedWatch data.

AI chip firm Nvidia slipped 3.18%, while semiconductor stocks Qualcomm, Broadcom and Micron Technology were down between 1.35% and 3.50%.

Wall Street's bumper gains since the final leg of 2023 have been primarily driven by the likes of Nvidia and a handful of other heavily weighted stocks linked to artificial intelligence. Analysts, however, have raised concerns whether the strong increase in their valuations is sustainable.

At 02:16 p.m. the Dow Jones Industrial Average rose 28.11 points, or 0.07%, to 39,162.87, the S&P 500 lost 7.35 points, or 0.13%, to 5,465.82 and the Nasdaq Composite lost 27.49 points, or 0.16%, to 17,693.22.

Spirit AeroSystems rose 5.46% following a Reuters report that Boeing is nearing a deal to buy back the airplane parts supplier after months of talks.

Sarepta Therapeutics soared 32.08% after the U.S. FDA allowed expanded use of the company's gene therapy for patients with Duchenne muscular dystrophy aged four and older.

Declining issues outnumbered advancers by a 1.34-to-1 ratio on the NYSE. There were 71 new highs and 56 new lows on the NYSE.

The S&P 500 posted 19 new 52-week highs and one new low while the Nasdaq Composite recorded 24 new highs and 141 new lows. (Reporting by Echo Wang in New York; Additional reporting by Lisa Mattackal and Ankika Biswas in Bengaluru; Editing by Shounak Dasgupta and Aurora Ellis)