By Johann M Cherian and Purvi Agarwal
(Reuters) - Wall Street's main indexes were mixed on Wednesday, with the S&P 500 hovering near a record high, as investors awaited more indicators on the state of the economy and upcoming interest rate reductions.
The three main indexes were propped up for monthly gains after the Federal Reserve cut interest rates, raising expectations for a soft landing. However, a weak consumer sentiment report on Tuesday fanned some caution about the health of the labor market.
The yield on long-term Treasury bonds ticked higher on worries that looser financial conditions could re-ignite inflation. [US/]
Odds of a 50 basis point cut by the central bank at its November meeting have ticked up to 57.4%, from a coin toss earlier in the week, as per the CME Group's (NASDAQ:CME) FedWatch Tool.
"The Fed itself is suggesting additional cuts this year and well into 2025 but the market is certainly pricing in a more aggressive rate cut regime," said Scott Welch, chief investment officer at Certuity.
At 11:42 a.m. the Dow Jones Industrial Average fell 202.11 points, or 0.48%, to 42,006.11, the S&P 500 lost 0.01 points, or was flat at 5,732.92 and the Nasdaq Composite gained 47.87 points, or 0.26%, to 18,122.39.
Six out of the 11 S&P 500 sectors trended lower, led by energy stocks. Tech stocks bucked the trend, lifted by Nvidia's 3% gain.
The blue-chip Dow slipped after hitting record highs, bogged down by a 4.8% drop in Amgen (NASDAQ:AMGN) after the drugmaker reported mixed data on two drugs, fanning competition concerns.
The S&P 500 and the tech-heavy Nasdaq are up about 20% so far this year on rate cut expectations and optimism around artificial intelligence. However, the S&P 500 is trading at valuations high above longterm averages.
"The market has run up quite a bit and we may be reaching valuation levels where people begin to get uncomfortable," Welch added.
On the data side, sales of new U.S. single-family homes fell in August, but declining mortgage rates and house prices could stimulate demand in the months ahead.
The main focus, however, will be on the weekly jobless claims and personal consumption expenditure (PCE) index for August due later in the week.
Remarks from Fed Governor Adriana Kugler, due after markets close, will also be parsed. But focus will be on Chair Jerome Powell's speech at the New York Treasury Market Conference on Thursday.
Among others, Apple (NASDAQ:AAPL) slipped 0.7%. Sales of foreign-branded smartphones, including iPhones, in China fell in August on an annual basis, data from a government-affiliated research firm showed.
Citigroup, Bank of America (NYSE:BAC) and JPMorgan (NYSE:JPM) & Chase weighed on the broader bank index, which was down 1.2%.
KB Home fell 4% after posting a downbeat third-quarter profit.
Hewlett Packard Enterprise topped the S&P 500 with a 4.8% gain after Barclays (LON:BARC)' rating upgrade.
Ford lost 4.3% and General Motors (NYSE:GM) fell 5.3% to bottom the benchmark index after Morgan Stanley (NYSE:MS) lowered its recommendations on the automakers.
Declining issues outnumbered advancers by a 1.69-to-1 ratio on the NYSE and by a 1.65-to-1 ratio on the Nasdaq.
The S&P 500 posted 34 new 52-week highs and one new low, while the Nasdaq Composite recorded 55 new highs and 57 new lows.