* Nasdaq on track for its best week since February
* Monster Beverage rallies, Coca-Cola takes stake
* Applied Material up on results, Nordstrom falls
* Indexes up: Dow 0.3 pct, S&P 0.4 pct, Nasdaq 0.6 pct (Updates to market open)
By Ryan Vlastelica
NEW YORK, Aug 15 (Reuters) - U.S. stocks rose on Friday, putting major indexes on track for a second week of gains, as a growing consensus that there would be no immediate escalation in the tense situations in Ukraine or Iraq offset weak data on manufacturing and consumer sentiment.
The market continued to take its cue from news overseas. Ukrainian border guards crossed the frontier to inspect a huge Russian aid convoy, which some had speculated could be a cover for a military invasion. The inspection comes a day after Russian President Vladimir Putin struck a softer tone in comments regarding Ukraine.
In Iraq, Nuri al-Maliki stepped down as prime minister, paving the way for a new coalition that world and regional powers hope will be able to quash a Sunni Islamist insurgency that threatens Baghdad.
"While no one is discounting the possibility that these issues could get worse next week, there hasn't been anything untoward yet with the inspections or in Iraq, and that's a positive," said Nicholas Colas, chief market strategist at the ConvergEx Group in New York.
In the latest economic data, the New York Federal Reserve's report on manufacturers showed business conditions improved in August, though at a slower rate than expected. Separately, U.S. consumer sentiment fell in August to its lowest since last November, according to the Thomson Reuters/University of Michigan Surveys of Consumers.
"These are disappointing, but there's a growing feeling that the U.S. is going to be the best market to be in for the rest of the year," Colas said. "U.S. equities look like a better value than U.S. Treasuries, or certainly European equities."
The Dow Jones industrial average rose 51.05 points or 0.31 percent, to 16,764.63, the S&P 500 gained 7.92 points or 0.41 percent, to 1,963.1 and the Nasdaq Composite added 28.24 points or 0.63 percent, to 4,481.24.
For the week, the Dow is up 1.3 percent, the S&P is up 1.6 percent and the Nasdaq is up 2.5 percent. It is the biggest weekly gain for the S&P since April, and the biggest for the Nasdaq since February.
The S&P is 1.2 percent off a closing record hit late July. In a sign of the market's long-term strength, the index has marked more than 1,000 days since its last correction, which Wall Street defines as a drop of 10 percent from the most recent high.
Monster Beverage Corp jumped 28 percent to $92 after Coca-Cola Co said it was buying a 16.7 percent stake in the company for $2.15 billion.
The stock was the S&P's biggest gainer, followed by Applied Materials Inc, up 5.6 percent to $22.34 a day after it reported third-quarter earnings that beat expectations.
On the downside, Nordstrom Inc fell 3.8 percent to $66.09 a day after its results, the latest disappointing read for the retail sector after both Macy's Inc and Wal-Mart cut their outlooks earlier this week. (Editing by Bernadette Baum)